This question has two sub-questions and the data of the portfolios is given in the table below.

Assume that t-bills generates a return of 4 %. Which of the following risky portfolios is the optimal risky portfolio for a portfolio where you invest between 0 % and 100 % of your capital in the risky portfolio?

Now assume that you wish to create a portfolio which has an expected return of 13 %. It will turn out that you need to have a leveraged portfolio to achieve this (you will need to borrow money and invest it in a risky portfolio.) If the rate at which you borrow is 9 %, then which risky portfolio is optimal for you to invest in in this scenario?

	E(r)
Portfolio A	9 %	25 %
Portfolio B	12 %	50 %
Portfolio C	7 %	24 %

Select one:

a. Portfolio C is always the optimal risky portfolio since it has the lowest risk.

b. Portfolio B is always the optimal risky portfolio since it has the highest expected return.

c. Portfolio A is the optimal risky portfolio in the first case and portfolio B is the optimal risky portfolio in the second case.

d. It is not possible to achieve an expected return of 13 %.

e. Portfolio A is the optimal risky portfolio in both cases.