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FINANCIAL MODELING QUESTION 1 Thabo's initial wealth is R100 000. Suppose he borrows R50 000 at 6% interest rate and invest the entire R150 000

FINANCIAL MODELING

QUESTION 1

Thabo's initial wealth is R100 000. Suppose he borrows R50 000 at 6% interest rate and invest the entire R150 000 in a risky asset with an expected return of 15%. Determine the expected rate of return for his portfolio

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