What return should be expected from investing in the market portfolio which is expected to yield 18% if the investment includes all of the investor's funds plus 100% of additional funds borrowed at the risk-free rate of 6%? A)18.6% B)19.6% C)21.6% D)30.0% Beta = (2.0 x B_market) + (-1 x B_loan) = (2.0 x 1) + 0 = 2)0 Expected return = 6% + 2.0(18% - 6%) = 6% + 24%

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The Answer of What return should be expected from investing in the market portfolio which is expected to yield 18% if the investment includes all of the investor's funds plus 100% of additional funds borrowed at the risk-free rate of 6%? A)18.6% B)19.6% C)21.6% D)30.0% Beta = (2.0 x B_market) + (-1 x B_loan) = (2.0 x 1) + 0 = 2)0 Expected return = 6% + 2.0(18% - 6%) = 6% + 24%

What Return Should Be Expected from Investing in the Market