Use the Information for the Question(s)below

question 85

Multiple Choice

Use the information for the question(s) below.
Suppose that you currently have $250,000 invested in a portfolio with an expected return of 12% and a volatility of 10%.The efficient (tangent) portfolio has an expected return of 17% and a volatility of 12%.The risk-free rate of interest is 5%.
-You want to maximize your expected return without increasing your risk.Without increasing your volatility beyond its current 10%,the maximum expected return you could earn is closest to:

• A).12.0%.
• B)12.5%.
• C)13.4%.
• D)15.0%.

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Definitions:

Stackelberg Firm

A business that is considered a leader in a market, setting prices or quantities that followers in the market then respond to.

Incentive

A motivation or reward offered to encourage specific behaviors or actions, often used in business, economics, and psychology.

Accommodation

The provision of a place to stay or the process of adjusting something to match a certain need.

War

A state of armed conflict between different countries or different groups within a country.