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

question 17

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.
-What alternative investment has the lowest possible volatility while having the same expected return as Google?

• A)-25% in the risk-free asset and +125% in the market portfolio
• B)-20% in the risk-free asset and +120% in the market portfolio
• C)0% in the risk-free asset and +100% in the market portfolio
• D)20% in the risk-free asset and +80% in the market portfolio

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Definitions:

Cytosine Dimers

Incorrect pairing of cytosine bases that can occur due to damage, often caused by ultraviolet radiation, leading to mutations.

Purine Base

A type of nitrogenous base found in DNA and RNA, including adenine and guanine, which are essential for genetic information.

Pyrimidine Base

A nitrogenous base that is one of the components of nucleic acids, including cytosine, thymine (in DNA), and uracil (in RNA).

Two Rings

Refers to the molecular structure characteristic of certain organic compounds, notably purines and certain types of aromatic hydrocarbons, consisting of two connected rings of atoms.