13. If you place 50% of your funds in the market portfolio and the remainder in the risk-free asset, the expected return and the standard deviation of the return on the portfolio are equal to ________ respectively.

a. 14%; 27%

b. 5%; 27%

c*. 9.5%; 13.5%

d. 11.75%; 20.25%

e. 18.5%; 40.5%

14. If you borrow 50% of the funds at the risk-free interest rate and invest the borrowed and all other funds in the risky portfolio, the expected return and the standard deviation of the return on the portfolio are equal to _____________ respectively.

a. 14%; 27%

b. 5%; 27%

c. 9.5%; 13.5%

d. 11.75%; 20.25%

e*. 18.5%; 40.5%