You Own Two Mutual Funds

question 51

Multiple Choice

You own two mutual funds.Fund A has an expected return of 12% and a beta of 0.8.Fund B has an expected return of 18% and a beta of 1.4.If your portfolio beta is the same as the market portfolio,what proportion of your portfolio is invested in fund A?

• A) 1/4
• B) 1/3
• C) 1/2
• D) 2/3
• E) 3/4

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Definitions:

Coverdell Education

A savings account designed to help families pay for education expenses, offering tax-free growth and withdrawals when for qualified education costs.

Qualified Profit-Sharing

A retirement plan that allows employers to contribute to their employees' retirement savings, which are then invested and allocated to individual accounts.

Additional Tax

The extra amount of tax that taxpayers may owe after their initial tax payment or withholding.

IRS Tax Levy

A legal seizure by the Internal Revenue Service to capture property or assets to satisfy a tax debt.