Which One of the Following Statements Is Correct Concerning a Portfolio

question 30

Multiple Choice

Which one of the following statements is correct concerning a portfolio beta?

• A) Portfolio betas range between −1.0 and +1.0.
• B) A portfolio beta is a weighted average of the betas of the individual securities contained in the portfolio.
• C) A portfolio beta cannot be computed from the betas of the individual securities comprising the portfolio because some risk is eliminated via diversification.
• D) A portfolio of U.S. Treasury bills will have a beta of +1.0.
• E) The beta of a market portfolio is equal to zero.

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Definitions:

Psychoneuroimmunology

The study of how psychological, neural, and endocrine processes together affect the immune system and resulting health.

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, including stages of alarm, resistance, and exhaustion.

General Adaptation Syndrome

A three-stage response to stress consisting of alarm, resistance, and exhaustion, theorized by Hans Selye.

Alarm Reaction

The initial stage in the stress response where the body readies itself for fight or flight, part of the General Adaptation Syndrome.