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Assume the complete portfolio has an expected return of 10% and the risk free rate is 1%. However, you wish to lever your portfolio by

Assume the complete portfolio has an expected return of 10% and the risk free rate is 1%. However, you wish to lever your portfolio by 50% (i.e., y = 1.5) and the cost to borrow to do so is 2%. Your expected return is: A. 14.5% B. 14.0% C. 13.0% D. 12.5%

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