Question
Your investment portfolio consists entirely Google stock. Suppose that the risk-free rate is 4%, Google stock has an expected return of 14% and a volatility
Your investment portfolio consists entirely 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.
What alternative investment has the lowest possible volatility while having the same expected return as Google?
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Corporate Finance The Core
Authors: Jonathan Berk, Peter DeMarzo
4th Global Edition
1292158336, 9781292158334
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