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:

Sensory Registers

Memory systems that hold sensory information for a very short period of time, allowing it to be processed further.

Visual Information

Data received by the eyes and processed by the brain to form images, playing a crucial role in how humans perceive and interact with their environment.

Memory

The cognitive process of encoding, storing, and retrieving information.

Acquisition

Acquisition is the process of obtaining or gaining possession of something, often referring to knowledge, skills, or assets.