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An investment of 10,000 in stock S has an expected return of 10% and volatility 30%. The annual effective risk-free interest rate is 4%. You

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An investment of 10,000 in stock S has an expected return of 10% and volatility 30%. The annual effective risk-free interest rate is 4%. You will borrow x at the risk-free rate and invest it in stock S in order to increase your expected return to 12%. Determine x Determine the volatility of the portfolio after the loan is taken. (2)

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