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

question 60

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 0.25 and σ_M was 0.21, the β of the portfolio would be approximately ________.

• A) 0.64
• B) 1.19
• C) 1.25
• D) 1.56

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Definitions:

Synchronously

Occurring at the same time or rate, synchronously refers to processes or events that are coordinated in time or operate in unison.

FIFO File

A method of handling data where the first piece of data entered is the first one to be processed or removed, similar to a queue.

False-to-true Transition

A change in state or condition from false (off or 0) to true (on or 1), often used in digital electronics or programming logic.

Shift Register

A digital memory circuit used to store and shift bits, often used in serial communication and for temporary data storage.