Mr. Miles approaches his broker to borrow money against securities held in his portfolio.

Even though Mr. Miles’ loan will be secured by the securities in his portfolio, the broker’s rate for lending to customers is 7 percent. Assuming a risk-free rate of 5 percent and a market return of 15 percent with a standard deviation of 20 percent, estimate Mr. Miles’ expected return and risk if he invests 25 percent and 75 percent in the risk-free asset and if he decides to borrow 25 percent and 75 percent of his initial investment and invest the money in the market.