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Your available wealth for investment is $850,000. Both the risk-free rate and your borrowing rate are 8%. The return on the risky portfolio is 16%.

Your available wealth for investment is $850,000. Both the risk-free rate and your borrowing rate are 8%. The return on the risky portfolio is 16%. If you wish to earn a 21% return, you should

a. borrow $531,250

b. invest $318,750 in the risk-free asset

c. invest $531,250 in the risk-free asset

d. borrow $318,750

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