You Have a $15,000 Portfolio Which Is Invested in Stocks

question 33

Multiple Choice

You have a $15,000 portfolio which is invested in Stocks A and B, and a risk-free asset. $6,000 is invested in Stock A. Stock A has a beta of 1.63 and Stock B has a beta of .95. How much needs to be invested in Stock B if you want a portfolio beta of 1.10?

• A) $8,998.90
• B) $8,333.33
• C) $7,706.20
• D) $7,073.68
• E) $9,419.27

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Definitions:

Correlated Variables

Two or more variables that are related in some way, where a change in one is often associated with a change in the other(s).

Confidentiality

The ethical and legal duty to protect information from unauthorized access, use, disclosure, modification, or destruction.

Social Research

The process of conducting research to understand human behavior, social interactions, and societal structures.

Ethnographic Research

A qualitative research method that involves observing and interacting with a study's participants in their real-life environment to understand their cultures, behaviors, and perceptions.