You Would Like to Combine a Risky Stock with a Beta

question 101

Multiple Choice

You would like to combine a risky stock with a beta of 1.76 with U.S. 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 the risky stock?

• A) 63.3 percent
• B) 49.6 percent
• C) 47.2 percent
• D) 56.8 percent
• E) 52.0 percent

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Definitions:

Consultative Selling

A sales approach where the seller acts as an advisor, focusing on the customer's needs and providing solutions to meet those needs.

Adaptive Selling

A need-satisfaction presentation format that involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information.

Objections

Concerns or arguments raised by a customer or client against a product or service being sold.

Rationalizations

The process of providing reasonable explanations or justifications for decisions, actions, or beliefs, often in retrospect.