You Currently Own a Stock Portfolio That Has a Beta

question 65

Multiple Choice

You currently own a stock portfolio that has a beta of 1.2. If you fully hedge your stock portfolio you will effectively change the portfolio's beta to which one of the following?

• A)0
• B)1
• C)1 / 1.2
• D)1.2
• E)1.22

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Definitions:

Best Friend

A person's closest and most intimate companion, with whom one shares a bond of mutual affection exceeding that of ordinary friendships.

Withdawn-Rejected

Typically relates to social withdrawal behavior observed in individuals, especially children, who are not actively sought after for interaction or play and hence tend to be isolated.

Timid

Characterized by a lack of courage or confidence; easily frightened.

Anxious

Feeling of worry, nervousness, or unease about something with an uncertain outcome.