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

question 33

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 1.12. You have decided to sell a lead mining stock What is the new beta of the portfolio?

• A) 1.1139
• B) 1.1700
• C) 1.2311
• D) 1.2927
• E) 1.3573

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Definitions:

Portfolio Analysis

Portfolio analysis is the process of evaluating and managing a collection of investments, assets, or business units to optimize performance and align with strategic goals.

Target Market

A specific group of potential consumers towards which a company directs its marketing efforts and strategies to sell its products or services.

Competitive Superiority

The advantage that a company has over its competitors, allowing it to generate greater sales or margins and/or retain more customers.

Segment Attractiveness

Evaluation of a market segment based on criteria such as size, growth, profitability, and compatibility with business objectives.