The Beta of an Active Portfolio Is

question 1

Multiple Choice

The beta of an active portfolio is .80. The standard deviation of the returns on the market index is 25%. The nonsystematic variance of the active portfolio is 0.03. The standard deviation of the returns on the active portfolio is

• A) 28.32%.
• B) 26.46%.
• C) 24.62%.
• D) 22.17%.
• E) 20.08%.

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Definitions:

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Concrete Operational Stage

A stage in Piaget's theory of cognitive development (approximately age 7-12) where children gain the ability to think logically about concrete events.

Transitive Inference

A form of reasoning that allows the deduction of relationships between items not directly compared, often formulated as "If A>B and B>C, then A>C."

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