An Investor Is Considering the Three Stocks Given Below:
$\beta$

question 8

Essay

An investor is considering the three stocks given below:

C. Demonstrate that holding stock A actually reduces risk by comparing the risk of a portfolio equally weighted between stock B and T-Bills with a portfolio equally weighted between stock B and
A.
Stock B and C: Rp = .5(13.3%) + .5(9.2%) = 11.25%
Stock B and C: $\beta$ p = .5(2.1) + .5(0.75) = 1.425
Stock B and T-bills: $\beta$ B&TBILL = .5(2.1) + .5(0) = 1.05
Stock's B and A: $\beta$ B&A = .5(2.1) + .5(-0.1) = 1.00

---

Definitions:

Role Ambiguity

A situation where an employee lacks clarity about job duties, responsibilities, and expectations, often leading to confusion and stress.

Job Descriptions

Documents that outline the duties, responsibilities, required qualifications, and reporting relationships of a specific job.

Employee Empowerment

Granting employees power to initiate change, thereby encouraging them to take charge of what they do.

Team Building

The process of enhancing social relations, defining roles within teams, and solving task and interpersonal problems among team members.