9. You have $1,000,000 available to invest. The risk-free rate as well as your borrowing rate is 5%. The return on the risky portfolio is 10%. If you wish to earn a 20% return, you should A)invest $2,000,000 in the risk-free asset B) borrow $1,500,000 C) borrow $2,000,000 D) borrow $1,000,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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9. You have $1,000,000 available to invest. The risk-free rate as well as your borrowing rate is
5%. The return on the risky portfolio is 10%. If you wish to earn a 20% return, you should
A)invest $2,000,000 in the risk-free asset B) borrow $1,500,000
C) borrow $2,000,000 D) borrow $1,000,000
Transcribed Image Text:9. You have $1,000,000 available to invest. The risk-free rate as well as your borrowing rate is 5%. The return on the risky portfolio is 10%. If you wish to earn a 20% return, you should A)invest $2,000,000 in the risk-free asset B) borrow $1,500,000 C) borrow $2,000,000 D) borrow $1,000,000
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