Your Portfolio Has a Beta of 1

question 57

Multiple Choice

Your portfolio has a beta of 1.28. The portfolio consists of 35 percent U.S. Treasury bills, 31 percent Stock A, and 34 percent Stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of Stock B?

• A) 1.47
• B) 1.52
• C) 2.04
• D) 1.84
• E) 2.85

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Definitions:

Engine Size

A measure of the volume of the combustion chambers in a vehicle's engine, typically expressed in liters or cubic centimeters, often linked to the power output.

Gas Mileage

The distance a vehicle can travel per unit volume of fuel, usually measured in miles per gallon (mpg) or kilometers per liter (km/l).

Scatterplot

A graphical representation of data using Cartesian coordinates to display values for two variables for a set of data, revealing any correlations between them.

Scatterplot

A visual diagram that illustrates the connection between two numerical variables.