Capital allocation
Risky portfolio P and risk-free asset
Investor & allocation
Borrowing
w* pinned at the kink (w = 1).
When on, you can only borrow above rf, so the CAL kinks (flattens) beyond P at w = 1.
CAL & complete portfolio
Indifference curve (current)
Indifference curve at w*
Utility vs. allocation w