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You chose your portfolio following the advice of the modern portfolio theory. Suppose you had $100,000 in cash and you borrowed another $29,058 from the
You chose your portfolio following the advice of the modern portfolio theory. Suppose you had $100,000 in cash and you borrowed another $29,058 from the bank at the annual risk-free rate of 4%. You invested your cash and the amount you borrowed in a risky portfolio with annual expected return of 19% and standard deviation of 25%. What return do you earn if the risky portfolio you invested in goes up by 15% over a year? round to 4 decimals
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