Suppose You Hold a Portfolio Consisting of a $10,000 Investment

question 32

Multiple Choice

Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks.The portfolio's beta is 1.25.Now suppose you decided to sell one of your 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:

Sample Proportions

The fraction or percentage of items in a sample that are part of a particular category or characteristic.

Lower Control Limit

The lowest boundary in a control chart used to monitor process variability; falling below this limit signals an out-of-control process.

Too Variable

A description of data that exhibits a high degree of variation or variability, indicating a wide spread of data points around the mean value.

P Chart

Also known as a proportion chart, it tracks the fraction of nonconforming units in process quality control.