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Suppose you borrow at the risk-free rate an amount twice of your initial wealth and invest in a portfolio with an expected return of 15%
Suppose you borrow at the risk-free rate an amount twice of your initial wealth and invest in a portfolio with an expected return of 15% and a standard deviation of returns of 10%. The risk-free asset has an interest rate of 3%. Calculate the standard deviation of the resulting portfolio.
40 percent
20 percent
24 percent
30 percent
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