Question: 15 . A margin user has a situation where the riskfree rate is 6% and the risky portfolio has an expected return of 12% with

15. A margin user has a situation where the riskfree rate is 6% and the risky portfolio has an expected return of 12% with a standard deviation of 15%. If the proportion in risky portfolio is 1.8, the expected return is: (a) 14.6%. (b) 19.2%. (c) 21.6%. (d) 16.8%. 16. A margin user has a proportion 1.3 invested in the risky portfolio that has .4 in A with an expected return of 14%, .6 in B with an expected return of 18%. If the riskfree rate is 5%, her expected return is (a) 21.3%. (b) 16.4%. (c) 19.8%. (d) 18.2%.

Please answer #15 & #16 in detail. I think the answers are D 16.8 for #15 and and C 19.8 for #16 but I need full detailed explanation

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!