Determine the Beta of a Portfolio Consisting of the Following

question 48

Multiple Choice

Determine the beta of a portfolio consisting of the following common stocks: $$\begin{array} { l c c } \text { Security } & \text { Market Value } & \text { Beta } \\\text { Glaxo } & \$ 2,600 & 1.24 \\\text { SCANA } & 3,700 & 0.88 \\\text { BancOne } & 2,900 & 0.95 \\\text { Pepsi } & 3,400 & 1.05 \\\text { AFLAC } & 3,000 & 1.09 \\\text { Votec } & 4,400 & 1.41\end{array}$$

• A) 1.00
• B) 1.12
• C) 1.09
• D) 1.11

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Definitions:

Random Variable

A variable representing the numeric outcomes from a random phenomenon.

Joint Probabilities

The probability of two or more events happening at the same time, assuming they are related.

Complement

In probability theory, the complement of an event is the set of all outcomes that are not in the event.

Event A

A specified occurrence or outcome, often used in probability and statistics to denote a specific set of results within an experiment.