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

question 26

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.
-The volatility of the alternative investment that has the lowest possible volatility while having the same expected return as Google is closest to:

• A)18.0%.
• B)22.5%.
• C)23.4%.
• D)35.0%.

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Definitions:

Clayton Act

A U.S. antitrust law, adopted in 1914, aimed at protecting competition by prohibiting certain actions that lead to anticompetitiveness.

Celler-Kefauver Act

A U.S. law enacted in 1950 to amend the Clayton Act, aiming to prevent anti-competitive mergers and acquisitions by prohibiting the acquisition of assets if the effect reduces competition.

Mergers

The combination of two or more companies into one entity, often to enhance market share and reduce competition.

Celler-Kefauver Act

A U.S. law enacted in 1950, aimed at preventing anti-competitive mergers and acquisitions that could create monopolies or reduce competition.