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An investor with a coefficient of risk aversion of 2.5 is designing a risky portfolio based on two stocks, P and M. Stock P has an expected rate of return of 18% and a standard deviation of return of 30%. Stock M has an expected rate of return of 14% and a standard deviation of return of 5%. The correlation coefficient between the two stocks is 0.5. The risk-free rate is 5%. Describe the optimal risky portfolio for this investor, i.e., show the weights of stocks, the expected return, the standard deviation of return, and the maximum utility on this optimal risky portfolio.

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