The Beta of an Active Portfolio Is 1

question 34

Multiple Choice

The beta of an active portfolio is 1.36.The standard deviation of the returns on the market index is 22%.The nonsystematic variance of the active portfolio is 1.2%.The standard deviation of the returns on the active portfolio is

• A)3.19%.
• B)31.86%.
• C)42.00%.
• D)27.57%.

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Definitions:

Sampling Methods

Techniques used to select samples from a population for the purpose of conducting research and obtaining data.

Aggregation

In psychology, a method involving the combination of multiple measurements or observations over time to obtain a more reliable estimate of a trait or behavior.

Random Errors

Errors in measurement or observation that arise from unpredictable and uncontrollable variations, leading to a lack of consistency.

Case Study Method

A research approach that involves the intensive analysis of an individual unit (such as a person or a group) to explore and understand complex issues.