Jackie borrowed $500 at the risk-free rate of 8 percent. She invested the borrowed money and her

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Jackie borrowed $500 at the risk-free rate of 8 percent. She invested the borrowed money and her own money of $1,500 in a portfolio with a 15-percent rate of return and a 30-percent standard deviation. What is the expected return and standard deviation of her portfolio?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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