The expected return on shares in Hunki Dory Ltd (HDL) is 14%, with a standard deviation of 18%. The risk-free rate is 5%. Yanghui has $20,000 to invest. She borrows $5000 at the risk-free rate and invests $25,000 in HDL shares. Her expected return and standard deviation of return are closest to:

The correct answer is B. Please show the working steps.

The expected return on shares in Hunki Dory Ltd (HDL) is 14%, with a standard deviation of 18%. The risk-free rate is 5%. Yanghui has $20,000 to invest. She borrows $5000 at the risk-free rate and invests $25,000 in HDL shares. Her expected return and standard deviation of return are closest to Expected return-15.8%; standard deviation-21.6% Expected return 16.25%; standard deviation = 22.5% Expected return-16.25%; standard deviation-20.1% Expected return = 15.8%; standard deviation = 22.5%