Determine the Beta of a Portfolio Consisting of the Following

question 61

Multiple Choice

Determine the beta of a portfolio consisting of the following common stocks: $$\begin{array} { l l l } \text { Security } & \text { Market Value } & \text { Beta } \\\text { Boeing } & \$ 5,000 & 1.2 \\\text { Exxon } & \$ 4,000 & 0.8 \\\text { Duke Power } & \$ 2,500 & 0.6 \\\text { Blockbuster Video } & \$ 2,000 & 1.4 \\\text { Coca-Cola } & \$ 7,500 & 1.0\end{array}$$

• A) 0.93
• B) 0.85
• C) 1.00
• D) 1.14

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Definitions:

Population Average

Refers to the mean value of a characteristic within a given population.

Confidence Interval

An array of numerical outcomes, taken from sample analysis, believed to encase the estimated value of a population variable.

Population Means

The average value of a given characteristic within a specified population.

Point Estimate

A single value or statistic calculated from a sample and used to estimate a corresponding population parameter.