The Beta of an Active Portfolio Is 1

question 15

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%.
• E) 2.86%.

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Definitions:

Monogamous Marriages

A form of marriage in which an individual has only one spouse at a time.

Polygynous

A mating system in which a male has more than one female partner at the same time.

Cultures

The shared beliefs, practices, symbols, language, art, and values of a group of people, passed down from generation to generation.

Sororal Polygyny

A form of polygyny where a man is married to multiple wives who are sisters to each other, often practiced in some polygamous societies to strengthen family bonds.