You Are Going to Invest $20,000 in a Portfolio Consisting

question 80

Multiple Choice

You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows:
$\begin{array}{ccccc}&\text { Annual }\\\text { Asset }&\text {Return }&\text {Probability}&\text { Beta}&\text { Proportion }\\\hline\mathrm{X} & 10 \% & 0.50 & 1.2 & 0.333 \\\mathrm{Y} & 8 \% & 0.25 & 1.6 & 0.333 \\\mathrm{Z} & 16 \% & 0.25 & 2.0 & 0.333\end{array}$
-The beta of the portfolio in Figure 7.2, containing assets X, Y, and Z, is

• A) 2.0.
• B) 2.4.
• C) 1.6.
• D) 1.5.

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Definitions:

Missing Factor

In mathematics, the unknown quantity in a multiplication problem that, when multiplied by a known quantity, gives a specific product.

Multiply

The mathematical operation of increasing one number by another number.

Combine

The process of adding or merging various elements or mathematical expressions together.

Simplify

The process of altering an expression or equation to make it easier to work with, often by combining like terms or applying mathematical operations.