Use the Information for the Question(s)below

question 2

Multiple Choice

Use the information for the question(s) below.
Tom's portfolio consists solely of an investment in Merck stock.Merck has an expected return of 13% and a volatility of 25%.The market portfolio has an expected return of 12% and a volatility of 18%.The risk-free rate is 4%.Assume that the CAPM assumptions hold in the market.
-Assuming that Tom wants to maintain the current expected return on his portfolio,then the minimum volatility that Tom could achieve by investing in the market portfolio and risk-free investment is closest to:

• A)20%.
• B)25%.
• C)22%.
• D)18%.

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Definitions:

Need for Touch

An individual's preference for tactile input and physical contact in the process of evaluating and purchasing products.

Branding

The process of creating a unique name, design, and image for a product or service, making it distinguishable from others in the market.

Packaging

The process or materials used to protect, contain, identify, and provide information about a product.

Visual Elements

Components such as colors, shapes, layout, and imagery that contribute to the aesthetic appeal and effectiveness of a design or artwork.