You Own a Portfolio That Is Equally Invested in Three

question 29

Multiple Choice

You own a portfolio that is equally invested in three assets: 1) the risk-free asset; 2) Stock 1; and 3) Stock 2.Stock 1 has a beta of 1.9 and the portfolio has the same risk as the market portfolio.
What is the beta of Stock 2 in the portfolio?

• A) 1.0
• B) 1.1
• C) 1.2
• D) 1.3
• E) 1.4

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Definitions:

Chemoaffinity Hypothesis

Proposal that neurons or their axons and dendrites are drawn toward a signaling chemical that indicates the correct pathway.

Stimulating Environments

Environments that provide sensory, intellectual, or emotional stimulation, which can enhance learning and development.

Stimulation Deprivation

A condition or situation in which an organism receives less sensory input or stimulation than is normal or necessary, potentially affecting development or functioning.

Human Affection

The feelings of love, warmth, and fondness between humans.