The Market Portfolio Has an Expected Return of 18% and the Risk-Free

question 59

Multiple Choice

The market portfolio has an expected return of 18% and the risk-free rate is 6%.An investor borrows $100 at the risk-free rate and invests this and a further $100 of his own in the market portfolio.What is his expected return?

• A) 18.6%
• B) 19.6%
• C) 21.6%
• D) 30.0%

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