Marie Has $10,000 to Invest

Multiple Choice

Marie has $10,000 to invest.She decided to borrow some funds at the risk-free rate of 6 percent to increase her investment in a portfolio with an expected return of 25 percent and a standard deviation of 30 percent.What is the expected return and standard deviation for her portfolio if she borrowed 50 percent of the portfolio value?

A) Expected return = 34.50%; standard deviation = 45.00%
B) Expected return = 45.00%; standard deviation = 34.50%
C) Expected return = 44.00%; standard deviation = 60.00%
D) Expected return = 60.00%; standard deviation = 44.00%