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

question 66

Multiple Choice

Use the following information to answer the question(s) below. The volatility of the market portfolio is 10%,the expected return on the market is 12%,and the risk-free rate of interest is 4%.
-Suppose that Google stock has a beta of 1.06 and Boeing stock has a beta of 1.31.If the risk-free interest rate is 4% and the expected return from the market portfolio is 12%,then the expected return on a portfolio that consists of 30% Google stock and 70% Boeing stock is closest to:

• A)12.5%.
• B)13.1%.
• C)13.5%.
• D)13.9%.

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Definitions:

Existential Instantiation

A logical rule inferring the existence of at least one instance of a predicate; used in proofs to show something exists.

Universal Instantiation

A principle in logic that allows for the deducing of a statement about a specific instance from a general statement that applies to all instances.

Universal Generalization

A form of deductive reasoning that concludes a general statement is true for all instances based on the observation of particular instances.

Quantifier Negation

The process of negating the quantifiers in a statement, such as changing "all" to "not all" or "some" to "none".