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Expected return of new portfolio

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Your portfolio currently consists of $50,000 of your own money solely invested in Amazon stocks with an expected return of 20%.

To increase the expected return of your portfolio, you decide to borrow $10,000 from your broker at the risk-free rate of 5% and invest the full loan amount on additional Amazon stocks. What is the expected return of your new portfolio?

X A: 15.00%

X B: 20.00%

X C: 23.00%

X D: 24.00%

X E: 24.83%

Please let me know the correct option WITH EXPLANATION AND STEP-BY-STEP WORKINGS Thank You.

Reference no: EM133061295

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