Use the Information for the Question(s)below

question 19

Multiple Choice

Use the information for the question(s) below.
Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a 6% interest rate to invest in the stock market.You invest the entire $20,000 in an exchange traded fund (ETF) with a 12% expected return and a 20% volatility.
-The volatility of your investment is closest to:

• A)40%.
• B)20%.
• C)30%.
• D)24%.

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Definitions:

Transactions

The action or process of conducting business or financial dealings involving the exchange of goods, services, or funds.

Common Law

A legal system based on judicial decisions and precedents rather than statutory laws.

Express Terms

Specific conditions and clauses explicitly stated in a contract or agreement, leaving no room for interpretation.

Contractual Parties

Contractual parties are the individuals or entities that enter into a contract with each other, agreeing to specified terms and obligations.