• John has decided to set aside part of his savings for investment in the stock market. As he anticipates the market to be bullish, he decides to borrow 25% of his investment at 5% to invest in an ETF with an expected return of 15% and standard deviation of 20%.

  
  

  Compute John's expected return and risk of his portfolio. 

  
  

  Would his portfolio's return and risk change substantially if he can only borrow at 7% which is higher than the risk free rate of 5% ?