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%

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Definitions:

Interpersonal Skills

Abilities used to effectively communicate, interact, and work with individuals and groups through understanding, empathy, and collaboration.

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The process of arranging data and information in a systematic way for easy access and understanding.

Main Idea

The central or most important idea of a paragraph or larger section of text, which tells the reader what the text is about.

Timing

The selection of the most appropriate or effective moment to perform an action or communicate a message.