You Would Like to Combine a Risky Stock with a Beta

question 272

Multiple Choice

You would like to combine a risky stock with a beta of 1.68 with U.S. Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in Treasury bills?

• A) .32
• B) .40
• C) .50
• D) .60
• E) .68

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Definitions:

Balance

The ability to maintain the body's center of mass over its base of support, crucial for daily activities and movement.

Seizures

Unregulated electrical disruptions within the brain leading to alterations in behavior, motor functions, emotions, and awareness levels.

Visual Deficit

Impairment in the ability to see normally, which can affect one or both eyes.

Blinking Lights

Flashing or flickering lights, often used as indicators, warnings, or for decorative purposes.