Suppose You Held a Well-Diversified Portfolio with a Very Large $\sigma$

question 43

Multiple Choice

Suppose you held a well-diversified portfolio with a very large number of securities, and that the single index model holds.If the $\sigma$ of your portfolio was 0.18 and $\sigma$ _M was 0.24, the $\beta$ of the portfolio would be approximately

• A)0.75.
• B)0.56.
• C)0.07.
• D)1.03.

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Definitions:

Anxiety Disorders

Mental health disorders characterized by significant anxiety or fear that interferes with daily activities, including generalized anxiety disorder, panic disorder, and social anxiety disorder.

GAD

Generalized Anxiety Disorder, a mental health condition characterized by excessive and persistent worrying about various aspects of life, not tied to any specific object or situation.

Sleep Apnea

A sleep disorder characterized by repeated interruptions in breathing during sleep owing to the temporary obstruction of the airway or to central nervous system dysfunction.