Tom O'Brien Has a 2-Stock Portfolio with a Total Value

question 110

Multiple Choice

Tom O'Brien has a 2-stock portfolio with a total value of $100,000.
$37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio's beta?

• A) 1.17
• B) 1.23
• C) 1.29
• D) 1.35
• E) 1.42

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Finished Goods Inventory

Finished goods available for sale but still held within the company's inventory.

Overapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead exceeds the actual manufacturing overhead incurred.

T-account

A graphical representation of a ledger account, illustrating the debit and credit sides for easier accounting analysis.