A Portfolio Consists of Two Stocks

question 70

Multiple Choice

A portfolio consists of two stocks. Stock J accounts for 55% of the portfolio and has a beta of 1.43. Stock K has a beta of .63. What is the portfolio beta?

• A).63
• B)1.07
• C)1.12
• D)1.23
• E)1.43

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Definitions:

Flexibility

The ability of a system, process, or entity to adapt to changes or demands without significant detriment or loss of functionality.

Consolidate Manufacturing

The process of centralizing or combining the production operations and facilities to improve efficiency and reduce costs.

Flexible Technology

Systems or equipment that can easily adapt to changes in production volume, design, or process, enhancing a company's ability to respond to market changes.

Facility Costs

Expenses associated with the physical means through which a company operates, such as rent, utilities, and maintenance of buildings and equipment.