# Expected Return

If the market has an expected return of 10%, a standard deviation of 20% and the risk-free rate is 4%, what proportion of your money should be invested in the market if you want an expected return of 16%?

A. 75%

B. 160%

C. 200%

D. It is impossible to get an expected return of 16% in this situation

https://brainmass.com/economics/income-distribution/calculating-expected-return-example-problem-311699

#### Solution Preview

Since the market has a return of only 10% and we need 16% return, we would need to borrow at risk free rate of 4%. ...

#### Solution Summary

The solution explains how to calculate the proportion to be invested to get a desired expected return.

$2.19