Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. an investor has $50,000 to invest. she decides to

An investor has $50,000 to invest. She decides to put $75,000 into the market by...

70.2K

Verified Solution

Question

Finance

An investor has $50,000 to invest. She decides to put $75,000 into the market by borrowing $25,000. You are given: The effective risk-free interest rate is 5%. The market expected return is 12%. The market volatility is 18%. Calculate the expected return and the volatility of the investment.

  1. Expected Return = 15.5%; Volatility = 7.3%

  2. Expected Return = 15.5%; Volatility = 27%

  3. Expected Return = 26%; Volatility = 7.3%

  4. Expected Return = 26%; Volatility = 54%

  5. Not enough information is given

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Describe the digestion and absorption and vascular transport of a fat (triacylglycerol). Include/specify all relevant mechanical and...

Medical Sciences
Q

A particle A having with a charge q 5 x 107C is clamped in vertical...

Physics
Q

18 If Io is the intensity of the principal maximum in the single slit diffraction...

Physics
Q

A bag contains 1 gold marbles, 6 silver marbles, and 24 black marbles. Someone offers...

Basic Math
Q

Simplify the radical expression completely 10 50 36 be sure to rationalize if necessary 0...

Algebra
Q

Use the following table to answer the

Accounting
Q

Crane Organics Ltd. Has a number of commercial greenhouse operations in British Columbias Fraser Valley....

Accounting
Q

The key differences between the cash basis and accrual basis of accountin timing and recognition...

Accounting
Q

how do incorporation as a social purpose corporation shifts the duty of Directors--specifically as this...

Accounting
Q

Of the following, which are criteria used by the compensation committee for the evaluation of...

Accounting
Q

5.2 Please show all work and formulas. CHAPTER 17: FINANCIAL CONDITION ANALYSIS Homework...

Accounting
Q

Targaryen Corporation has a target capital structure of 60 percent common stock, 5 percent preferred...

Finance