Min Has $5,000 to Invest

question 115

Multiple Choice

Min has $5,000 to invest.The expected return on the market portfolio is 11% with a standard deviation of 15%.What are the expected return and standard deviation for the portfolio if she borrowed $2,000 at the risk-free rate of 4% to invest in the market portfolio?

• A)Expected return = 19.40%; standard deviation = 15.40%
• B)Expected return = 15.40%; standard deviation = 19.40%
• C)Expected return = 13.80%; standard deviation = 21.00%
• D)Expected return = 21.00%; standard deviation = 13.80%

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Definitions:

Stocking Locations

Specific places where inventory is stored and managed, such as warehouses or retail storerooms.

Aggregate Inventory

The total stock of all items held across different locations within a supply chain.

Information Technology

The use of computers, storage, networking, and other physical devices, infrastructure, and processes to create, process, store, secure, and exchange all forms of electronic data.

Exchange

The act of giving one thing and receiving another in return, especially in a commercial context.