The Beta of an Active Portfolio Is 1

question 8

Multiple Choice

The beta of an active portfolio is 1.36. The standard deviation of the returns on the market index is 14%. The nonsystematic variance of the active portfolio is 0.04. The standard deviation of the returns on the active portfolio is

• A) 36.46%.
• B) 22.62%.
• C) 19.60%.
• D) 24.17%.
• E) 27.61%.

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Definitions:

Negative Behaviors

Actions or conduct that are detrimental to oneself or others.

Facilitator

A person who makes an action or process easy or easier, often guiding groups in discussions or activities.

Inhibits Creativity

Refers to factors or conditions that negatively affect or constrain one's ability to generate innovative ideas or solutions.

Know-it-All

A pejorative term for someone who acts as though they have an exhaustive knowledge on various topics, often without substantial evidence or expertise.