Question
Diane has $2,500 to invest. The expected return on the market portfolio is 11% with a standard deviation of 15%. What are the expected return
Diane has $2,500 to invest. The expected return on the market portfolio is 11% with a standard deviation of 15%. What are the expected return and standard deviation for the portfolio if Diane borrows an additional $1,000 at the risk free rate of 4% and invests everything in the market portfolio.
Answers : Expected return = 13.80% ; standard deviation = 21.00%
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Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. FinklerDaniel L. Smith, Thad D. Calabrese
6th Edition
978-1506396811, 150639681X
