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Suppose you have $125,000 in cash, and you decide to borrow another $30,000 at a 4% interest rate to invest in the stock market. You
Suppose you have $125,000 in cash, and you decide to borrow another $30,000 at a 4% interest rate to invest in the stock market. You invest the entire $155,000 in a portfolio J with a 19% expected return and a 21% volatility. a. What is the expected return and volatility (standard deviation) of your investment? b. What is your realized return if J goes up 13% over the year? c. What return do you realize if J falls by 34% over the year? a. What is the expected return and volatility (standard deviation) of your investment? The expected return of your investment is \%. (Round to two decimal places.)
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