What Is the Beta of a Portfolio If 30% of the Funds

question 55

Multiple Choice

What is the beta of a portfolio if 30% of the funds are invested in a risk-free asset, 40% in the market portfolio, and the balance in a portfolio that has three times the risk of the market portfolio?

• A)0.4
• B)0.7
• C)1.3
• D)1.8

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Definitions:

Marginal Costs

The additional charge associated with making one more unit of a product or service.

Fixed Capital

Assets and investments in physical goods such as buildings and machinery that are not consumed in the production process.

Variable Labor

Labor costs that vary directly with the level of production or business activity.

Average Cost

The total cost divided by the number of units produced, indicating the cost per unit of output.