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

---

Definitions:

Collision Theory

Collision theory explains how chemical reactions occur and why reaction rates differ for different reactions. It posits that for a reaction to occur, reactant particles must collide with sufficient energy and proper orientation.

Product Formation

The process in which chemical reactants transform into products in a chemical reaction.

Reactant Particles

Particles of substances that interact in a chemical reaction, leading to the formation of products.

Reaction Time

The duration between the start of a stimulus and the initiation of a response, or the time taken for a chemical reaction to occur.