Suppose Stan Holds a Portfolio Consisting of a $10,000 Investment

question 132

Multiple Choice

Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common stocks.The portfolio's beta is 1.25.Now suppose Stan decided to sell one of his stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35.What would the portfolio's new beta be?

• A) 1.17
• B) 1.23
• C) 1.29
• D) 1.36
• E) 1.43

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Definitions:

Feelings

Emotional states or reactions that are subjective and influenced by personal experiences, beliefs, or the environment.

Beliefs

Deeply held convictions or acceptances that something is true or exists, often based on cultural, intellectual, or personal understanding and faith.

Attitude Object

A specific entity toward which an individual's attitudes are directed, such as a person, product, issue, or concept.

Beliefs

Deeply held convictions or acceptances that certain things are true or real, often forming the basis of individual or collective actions and attitudes.