The Beta of an Active Portfolio Is 1

question 46

Multiple Choice

The beta of an active portfolio is 1.17. The standard deviation of the returns on the market index is 23%. The nonsystematic variance of the active portfolio is 0.06. The standard deviation of the returns on the active portfolio is

• A) 32.46%.
• B) 30.62%.
• C) 29.60%.
• D) 27.17%.
• E) 36.39%.

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Definitions:

Profit-Maximizing Monopolist

A single seller in a market that determines the quantity of goods to produce and sell in order to achieve the highest possible profits.

Total Cost Schedules

A tabulation or curve that shows the total cost incurred by a firm at each level of output produced.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Monopolist

An entity that is the sole provider of a particular product or service, controlling the market and setting prices without competition.