Use the Information for the Question(s)below

question 19

Multiple Choice

Use the information for the question(s) below.
Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a 6% interest rate to invest in the stock market.You invest the entire $20,000 in an exchange traded fund (ETF) with a 12% expected return and a 20% volatility.
-The volatility of your investment is closest to:

• A)40%.
• B)20%.
• C)30%.
• D)24%.

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Definitions:

ATC

Average Total Cost, which is the total cost of production divided by the quantity of output produced, encompassing both fixed and variable costs.

Plant Size

The physical capacity or output potential of a manufacturing or production facility.

Implicit Cost

The opportunity cost of using resources already owned by the firm for its current purpose, rather than their next best alternative use.

Economic Profits

The surplus remaining after total costs (both explicit and implicit) are subtracted from total revenues, often indicating the financial health and efficiency of a company.