10 Trixie has $300,000 to invest and has the following two investment options:

(1) investing or borrowing at the riskless rate of 3%, and

(2) a stock portfolio that has an expected return of 9%/year and a standard deviation of 15% per year. Trixie decides to borrow $150,000 at the riskless rate and then invest a total of $450,000 in the stock portfolio. Calculate the expected return and standard deviation of Trixie's final investment portfolio

Answer rating: 100% (QA)

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