Suppose You Held a Well-Diversified Portfolio with a Very Large

question 8

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 σ of your portfolio was 0.14 and σ_M was 0.19, the β of the portfolio would be approximately

• A) 0.74.
• B) 0.80.
• C) 1.25.
• D) 1.56.

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Definitions:

Ecological Theory

A theoretical framework in the social and biological sciences that explores how organisms interact with each other and with their environments.

Ethnic Group

A population or group characterized by a shared cultural heritage or lineage.

Territory

An area of land under the jurisdiction of a ruler or state, often with defined borders.

Ethnic Quotas

Are policies or practices of setting minimum or maximum numbers for the inclusion of individuals from specific ethnic groups in various areas, such as employment or education.