Expected return of the 3 fund portfolio = 0.08 Volatility of the 3 fund portfolio...
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Expected return of the 3 fund portfolio = 0.08 Volatility of the 3 fund portfolio = 0.127 Sharpe ratio = 0.471
Suppose that an investor states that her target annual expected return is 10% per year. Given that she can borrow money at 3% per year, describe how she could attain 10% annual expected return by using the 3-fund portfolio given in part (a) above. Assuming that the investor has 100K of her own money to invest in this manner, calculate how much she would need to borrow at 3%
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