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TiliK225 [7]
3 years ago
8

Richard has $500.00 to invest, but he is willing to borrow money to increase the size of his investment. How much should Richard

borrow to construct a portfolio with an expected return of 8% if the risk-free rate is 3% and the expected return of the optimal portfolio is 7%? a. $50.00 b. $100.00 c. $125.00 d. $375.00 e. $625.00
Business
1 answer:
liubo4ka [24]3 years ago
8 0

Answer:

c. $125.00

Explanation:

Let us assume the x for invested in portfolio

Invested proportion × expected return of the optimal portfolio + (1 - invested proportion) × risk free rate = expected return

x × 7% + (1 - x) × 3% = 8%

7% x + 3% - 3% x = 8%

4% x = 5%

X = 1.25

Now the invested amount would be

= 1.25 × $500

= $625

So, the borrowed amount would be

= $625 - $500

= $125

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The statements that there' little relationship between CSR behaviors and consumer reaction to the products and services of the firm according to survey results listed in the Harvard Business Review is not true.

8 0
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<u>Explanation:</u>

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You do an extensive survey and learn that 15 out of the 200 people surveyed like to eat out on Tuesdays. You then look only at t
Naily [24]

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Learn more about the population here: brainly.com/question/8696744

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A(n) ________ strategy focuses on new market and product development, innovation, and joint ventures. privatization external gro
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Internal growth is also known as organic or natural growth. Growth results in increased profit which is now reinvested in the business.

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The repeating economic changes that happen in a society over time are known as business cycles. It can be recognized by changes in the GDP and other macroeconomic indicators.

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