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:

Subtractive

A process or method that involves removing elements or aspects to simplify or reduce complexity.

Opponent Processes

A theory initially applied to color vision, suggesting that the perception of color is controlled by the activity of two opposing processes.

Additive Colour Mixing

The process of mixing different colors of light, where combining various lights can create a broad spectrum of colors.

Opponent Process Theory

A psychological and neurological model that describes how opposing neural systems determine the perception of colors, emotions, and motivations.