Suppose You Have $3,600 to Invest in Securities a and B.Security

question 22

Multiple Choice

Suppose you have $3,600 to invest in Securities A and B.Security A has an expected return of 6% and a beta of 0.5.Stock B has an expected return of 20% and a beta of 1.8.What is the expected return on the portfolio if the portfolio beta is 2.0?

• A)24.00%
• B)23.65%
• C)22.15%
• D)22.22%

---

Definitions:

Homeostasis

The natural tendency of the body to maintain a balanced internal state in order to ensure physical survival.

Intrinsic

Refers to motivation or value that is driven by an interest or enjoyment in the task itself, rather than relying on external pressures or rewards.

Extrinsic

Originating from or influenced by external factors outside of oneself, such as rewards or social pressures, rather than internal desires.

Instinct

Instinct refers to the innate, typically fixed patterns of behavior in animals and humans that are responded to specific stimuli, driven by evolutionary pressures.