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Your investment portfolio consists of $10000 worth of Google stock.
Your investment portfolio consists of $10000 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 assumption hold.What alternative investment has the lowest possible volatility while having the same expected return as Google?A. -25% in the risk-free asset and +125% in the market portfolioB. -20% in the risk-free asset and +120% in the market portfolioC. 0% in the risk-free asset and +100% in the market portfolioD. 20% in the risk-free asset and +80% in the market portfolio
