Tom O'Brien Has a 2-Stock Portfolio with a Total Value

question 109

Multiple Choice

Tom O'Brien has a 2-stock portfolio with a total value of $100,000.$37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42.What is his portfolio's beta?

• A)1.17
• B)1.23
• C)1.29
• D)1.35
• E)1.42

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Definitions:

Net Earnings

The amount of income generated after deducting the costs, expenses, and taxes from total revenue. It represents the actual profit of a business.

Qualified Education Loans

Loans taken out solely to pay for higher education expenses that are qualified for tax deductions or preferential tax treatment under U.S. tax law.

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Taxes that cover the Social Security and Medicare contributions for individuals who work for themselves.