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Section B (2 Mark)You have Rs.

Section B (2 Mark)

You have Rs. 5 Lacs available to invest. The risk free rate as well as the borrowing rate is 8%. The return on the risky portfolio is 16%. If you wish to earn 22% return, you should:

A.

Invest 125000/- in risky asset.

B.

Invest 375000/- in risk free asset.

C.

Borrow 125000

D.

Both A & B

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