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You have $500 000 available to invest. The risk-free rate as well as your borrowing rate is 8%. The return on the risky portfolio is

You have $500 000 available to invest. The risk-free rate as well as your borrowing rate is 8%. The return on the risky portfolio is 20%. If you wish to earn a 26% return, you should ________.

invest $200 000 in the risk-free asset

invest $250 000 in the risk-free asset

borrow $200 000

borrow $250 000

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