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you’ve formed an optimal 10-stock portfolio with an expected return of 20% and standard deviation of...

you’ve formed an optimal 10-stock portfolio with an expected return of 20% and standard deviation of 32%. an investor is willing to spend her investment budget of $100,000 in shares of Laggard Corp. which has an expected return of 12% and standard deviation of 40%. You tell her that you can offer a much better investment alternative with the same standard deviation of Laggard and higher expected return. If the risk-free rate is 4% (lending or borrowing), and given the information above, what would be the expected return of the improved investment alternative?

Select one:

a. 20%

b. 32%

c. 24%

d. 16%

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