You Own a Portfolio Equally Invested in a Risk-Free Asset

question 52

Multiple Choice

You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.46 and the total portfolio is equally as risky as the market. What is the beta of the second stock?

• A) 1.38
• B) .87
• C) 1.94
• D) 1.72
• E) 1.54

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Definitions:

Income Strata

Distinct categories of income levels within a society, often used to analyze social and economic disparities.

Sociologist

A social scientist who studies the development, structure, and functioning of human society and the dynamics of social interactions and relationships.

Households

Units consisting of one or more people who live in the same dwelling and share meals or living accommodation; may consist of a single family or some other grouping of people.

Statistical Categories

Classification schemes used in the collection and analysis of data to organize variables or attributes into groups.