Tom's portfolio consists solely of an investment in Merck stock. Merck has an expected return of 13% and a standard deviation of 25%. The market portfolio has an expected return of 12% and a standard deviation of 18%. The risk-free rate is 4%. Assume that CAPM assumptions hold. If Tom wants to maintain the current standard deviation of 25%, then the expected return that Tom could achieve by investing in the market portfolio and risk-free investment is closest to:

a. 13%

b. 15%

c. 12%

d. 16%

e. None of the above

how is the answer 15%?