A Portfolio Consists of Two Stocks and Has a Beta

question 80

Multiple Choice

A portfolio consists of two stocks and has a beta of 1.20. The first stock has a beta of 1.02 and comprises 30% of the portfolio. What is the beta of the second stock?

• A).41
• B).66
• C).82
• D)1.28
• E)1.35

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Definitions:

Poor Performance

Refers to a situation where an individual or group fails to meet established standards or objectives.

Satisfaction

The feeling of fulfillment or pleasure that arises from achieving one's goals or having one's needs or expectations met.

Complacency

A feeling of self-satisfaction accompanied by a lack of awareness of potential dangers or deficiencies.

Intergroup

Pertains to interactions or relations between different groups, often involving collaboration or competition.