You Would Like to Create a Portfolio That Is Equally

question 76

Multiple Choice

You would like to create a portfolio that is equally invested in a risk-free asset and two stocks.One stock has a beta of 1.39.What does the beta of the second stock have to be if you want the portfolio to be equally as risky as the overall market?

• A).72
• B).97
• C)1.23
• D)1.55
• E)1.61

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Definitions:

Interaction Effects

Refer to how the relationship between two variables changes when a third variable is introduced.

Factorial ANOVA

A statistical test used to compare the means of more than two groups considering multiple independent variables.

Research Hypotheses

Proposed explanations or predictions that are based on limited evidence as a starting point for further investigation.

Factorial Analysis

An analytical technique for interpreting the variability in observed, correlated variables through fewer unseen variables termed factors.