Final answer:
The optimal complete portfolio for a risk-averse investor is at the point of tangency between the investor's highest achievable utility indifference curve and the capital allocation line, representing the best affordable option on the opportunity set according to their risk preferences.
Step-by-step explanation:
The question asks about the optimal complete portfolio selection for a risk-averse investor according to mean-variance criterion. In the context of financial portfolio optimization, the investor would allocate assets in a way that maximizes utility while minimizing risk. The investor's optimal complete portfolio is designated by the point of tangency between the investor's highest achievable utility indifference curve and the capital allocation line (CAL). This is because the utility curve that is tangent to the CAL represents the highest level of utility that an investor can achieve given their risk aversion, out of all the affordable options on the opportunity set.
It's important to note that the Sharpe ratio, a measure of risk-adjusted return, is related but not directly the determining factor for the optimal portfolio in this scenario. The optimal portfolio is not necessarily the one with the highest Sharpe ratio in the opportunity set, nor the one with the highest Sharpe ratio in the utility indifference curve, rather it is the one that matches the investor's risk preferences as indicated by their highest achievable indifference curve that can be reached given their budget.