If the highest SR portfolio has a return that is equal or higher than the required return then we will always use this portfolio. If the required return is lower, then we will invest in a combination of RF and highest SR to bring the average return down to the required level.
If the target return is higher than that of the highest SR then in order to use this portfolio we will need to use leverage. If not allowed then we will have to use the nearest portfolios available ie nearest to the target return.
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