The Beta of an Active Portfolio Is 1

question 16

Multiple Choice

The beta of an active portfolio is 1.60. The standard deviation of the returns on the market index is 18%. The nonsystematic variance of the active portfolio is 0.05. 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:

Basal Ganglia

Groups of nuclei in the brain associated with a variety of functions, including control of voluntary motor movements, procedural learning, and habits.

Huntington's Disease

A genetic disorder that causes the progressive breakdown of nerve cells in the brain, leading to physical, cognitive, and psychological symptoms.

Cortex

The outer layer of the cerebrum in the brain, involved in complex functions such as thought, perception, and memory.

Classical Conditioning

A teaching approach whereby, through consistent pairing, a response initially elicited by a secondary stimulus is in time elicited by the primary stimulus.