Use the Following Information to Answer the Question(s)below

question 26

Multiple Choice

Use the following information to answer the question(s) below.
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 12% 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)22.5%.
• C)23.4%.
• D)35.0%.

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Definitions:

Residual Value

The estimated value of an asset at the end of its useful life, often considered in depreciation calculations.

Estimated Useful Life

The expected service life of an asset to the present owner

Units-Of-Production

A method of depreciation that allocates the cost of an asset over its useful life based on the amount of production or usage.