Suppose Amazon stock has a beta of 1.67, and I can either borrow or lend at the risk-free rate. If I am risk-averse and have $15,000, and I want a total portfolio that has an expected return of 12%, I should Expected Return Standard deviation Risk-free Asset 4% 0% Market Portfolio 10% 20% Amazon Stock 14% 50%

Question 7 options:

Put $7,500 into Amazon stock, and $7,500 into the market portfolio

Short sell $5,000 of the market portfolio, and invest $20,000 in the risk-free asset

Borrow $5,000 at the risk-free rate and put $20,000 into the market portfolio