Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. your available wealth for investment is $850,000.

Your available wealth for investment is $850,000. Both the risk-free rate and your borrowing rate...

50.1K

Verified Solution

Question

Accounting

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

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

The following shows the Consumer Price Index CPI for the years 2000 2005 All of...

Statistics
Q

Calculate the solubility of LaF3 (Ksp = 2 x 10-19) in grams per liter in: a)...

Chemistry
Q

Explain if the set below is a vector space given standard operations. The set of all even...

Advance Math
Q

1. Determine the following probabilities and for each item, provide a sketch of the associated areas...

Basic Math
Q

Indicate whether the genotype listed is heterozygous, homozygous recessive or homozygousdominanthomozygous recessiveheterozygoushomozygous dominant

Biology
Q

Which of the following might be an investigation of microclimate 201 O studying the temperature...

Biology
Q

The switch S in the circuit below is closed and then opened The closed conducting...

Physics
Q

12 You roll two dice Let A roll a three on either die and let...

Statistics
Q

1. Which of the following is not an element of fraud in a business environment?...

Accounting
Q

Which of the SECs organizational unitsdivisions and principal officesreviews the registration statements, annual reports, and...

Accounting
Q

Indicate for each company two specific examples of possible fixed costs, two specific examples of...

Accounting
Q

only mcq no need for explanation ...

Accounting