Suppose you have $100,000 in cash, and you decide to borrow another $15,000 at a 4 interest rate to invest in the stock market You invest the entire $115,000 in a portfolio J with a 15 expected return and a 25 volatility a What is the expected return and volatility (standard deviation) of your inve...

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Suppose you have $100,000 in cash, and you decide to borrow another $15,000 at a 4% interest

Question:

Suppose you have $100,000 in cash, and you decide to borrow another $15,000 at a 4% interest rate to invest in the stock market. You invest the entire $115,000 in a J with a 15% and a 25% volatility.
a. What is the and volatility (standard deviation) of your investment?
b. What is your realized return if J goes up 25% over the year?
c. What return do you realize if J falls by 20% over the year?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...