You Would Like to Combine a Risky Stock with a Beta

question 122

Multiple Choice

You would like to combine a risky stock with a beta of 1.5 with Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the
Portfolio should be invested in Treasury bills?

• A) .25
• B) .33
• C) .50
• D) .67
• E) .75

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Definitions:

Chemical Substances

Compounds or elements that consist of a specific set of molecules or ions; can be natural or synthetic and have various uses and effects.

Mild Anesthetic

A substance that induces a reversible loss of sensation or pain, used in minor surgical or medical procedures.

Altered States

Conditions of consciousness that significantly differ from one's normal waking state, which can be achieved through meditation, drugs, hypnosis, or other methods.

Effective Treatment

A therapeutic intervention or approach that has been scientifically tested and proven to work in improving or curing a condition or disease.