Use the Information for the Question(s)below

question 34

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 amount that Tom should invest in the market portfolio to minimize his volatility is closest to:

• A)100%
• B)90%
• C)125%
• D)110%

---

Definitions:

Regulate

Means to control or maintain the rate or speed of a process or system by making adjustments or imposing controls.

Reflective Listening

A communication technique involving understanding a speaker's message and then offering it back to the speaker to confirm the message has been understood correctly.

Active Listening

The process of fully concentrating, understanding, and responding during the course of a communication.

Developmental Feedback

Constructive comments or assessments aimed at fostering growth, learning, and improvement.