Multi-Choice Question:Your investment portfolio consists of $10,000 worth of Google stock. Suppose that the risk-free rate is 4%, Google stock has an expected return of 14% and a volatility of 35%, and the market portfolio has an expected return of 10% and a volatility of 18%. Assume that the CAPM assumptions hold.The volatility of the alternative investment that has the lowest possible volatility while having the same expected return as Google is closest to:A. 18.0%B. 30.0%C. 35.0%D. 10.8%

Multi-Choice Question:Your investment portfolio consists of $10,000 worth of Google stock. Suppose that the risk-free rate is 4%, Google stock has an expected return of 14% and a volatility of 35%, and the market portfolio has an expected return of 10% and a volatility of 18%. Assume that the CAPM assumptions hold.The volatility of the alternative investment that has the lowest possible volatility while having the same expected return as Google is closest to:A. 18.0%B. 30.0%C. 35.0%D. 10.8%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 25P

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Multi-Choice Question:Your investment portfolio consists of $10,000 worth of Google stock. Suppose that the risk-free rate is 4%, Google stock has an expected return of 14% and a volatility of 35%, and the market portfolio has an expected return of 10% and a volatiity of 18%. Assume that the CAPM assumptions hold.The volatility of the alternative investment that has the lowest possible volatility while having the same expected return as Google is closest to:A. 18.0%B. 30.0%C. 35.0%0. 10.8%
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