Assume That You Hold a Well-Diversified Portfolio That Has an Expected

question 27

Multiple Choice

Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20.You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio.Alpha has an expected return of 13.0% and a beta of 1.50.The total value of your current portfolio is $90,000.What will the expected return and beta on the portfolio be after the purchase of the Alpha stock?

• A)10.64%; 1.17
• B)11.20%; 1.23
• C)11.76%; 1.29
• D)12.35%; 1.36
• E)12.97%; 1.42

---

Definitions:

Workplace Performance

Measures the efficiency, effectiveness, and productivity with which an individual or group accomplishes tasks and objectives in a professional setting.

Academic Achievement

The extent to which a student, teacher, or institution has attained their short or long-term educational goals.

Internal Locus of Control

A belief that one has control over their own life and outcomes, as opposed to external forces having that control.

Learned Helplessness

An instance where someone experiences an overwhelming feeling of being powerless, due to either a distressing occurrence or ongoing unsuccessful attempts.