(20 points) Suppose you have $20,000 in cash, and you decide to borrow another $10,000 at a 5% interest rate in order to invest $30,000 in the tangent portfolio T, which has a 17% expected return and a 24% volatility. (Round your final answer to two decimal places.) 12. a) What is the expected return and volatility of your investment? (8 points) Step 1 er Ra= [++X/E[RQ] - RE 0.05+ 150x b) What is your realized return if Q goes up 20% over the year? (4 points) c) What is your realized return if Q falls by 20% over the year? (4 points) 510-1 ) If you want to have a volatility no more than 30%, how much should you borrow instead? (4 points)

12. (20 points) Suppose you have $20,000 in cash, and you decide to borrow another $10,000 at a 5% interest rate in order to invest $30,000 in the tangent portfolio T, which has a 17% expected return and a 24% volatility. (Round your final answer to two decimal places.) a) What is the expected return and volatility of your investment? ( 8 points) Stepe(RQ)=R+x(E[RQ]R 000% b) What is your realized return if Q goes up 20% over the year? (4 points) c) What is your realized return if Q falls by 20% over the year? ( 4 points) If you want to have a volatility no more than 30%, how much should you borrow instead? (4 points)