You Hold a Diversified Portfolio Consisting of a $5,000 Investment

question 45

Multiple Choice

You hold a diversified portfolio consisting of a $5,000 investment in each of 20 different common stocks. The portfolio beta is equal to 1.15. You have decided to sell one of your stocks, a lead mining stock whose b is equal to 1.0, for $5,000 net and to use the proceeds to buy $5,000 of stock in a steel company whose b is equal to 2.0. What will be the new beta of the portfolio?

• A) 1.12
• B) 1.20
• C) 1.22
• D) 1.10
• E) 1.15

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Definitions:

Sleep Cycle

The progression through various stages of non-REM and REM sleep that occur during a typical night, affecting sleep quality and health.

Napping

A short period of sleep, usually taken during the day, to supplement insufficient sleep at night or enhance alertness and performance.

Sleep Aid

A product or medication used to promote or improve sleep, often utilized by individuals with insomnia or other sleep disorders.

Caffeinated Coffee

A type of coffee beverage that contains caffeine, a stimulant that can enhance brain function and increase alertness.