You Hold the Following Portfolio, Consisting of Assets A, B

question 17

Multiple Choice

You hold the following portfolio, consisting of Assets A, B and C. What is the portfolio beta? $$\begin{array} { | c | c | c | c | } \hline \text { Asset } & \text { Return } & \text { Beta } & \begin{array} { c } \text { Portfolio } \\\text { Weight }\end{array} \\\hline \text { A } & 10 \% & 0.75 & 0.20 \\\hline \text { B } & 12 \% & 1.00 & 0.40 \\\hline \text { C } & 14 \% & 1.25 & 0.40 \\\hline\end{array}$$

• A)0.75
• B)1.00
• C)1.05
• D)1.15
• E)1.25

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Definitions:

Slope

The measure of the steepness or/incline of a line, representing the ratio of the vertical change to the horizontal change between two points on the line.

Average Revenue

The revenue generated per unit of output sold, calculated by dividing total revenue by the number of units sold.

Marginal Revenue

The extra revenue generated from the sale of an additional unit of a product or service.

Marginal Cost

Marginal cost is the increase in total cost that arises from producing one additional unit of a good or service.