You Want Your Portfolio Beta to Be 1

question 10

Multiple Choice

You want your portfolio beta to be 1.20. Currently, your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of.6. You have another $400 to invest and want to divide it between an asset with a beta of 1.6 and a risk-free asset. How much should you invest in the risk-free asset?

• A) $0
• B) $140
• C) $200
• D) $320

Understand the capacity requirements for parties in an agency relationship and how these affect the validity of agreements.

Understand the basic concepts and terminology used in programming languages.

Identify and describe the use and purpose of various data types in programming.

Recognize and explain the significance of syntax and grammar in programming languages.

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Definitions:

Deference

A show of respect or submission to the judgment, opinion, or wishes of another, often in a legal or official context.

Financial Stability Oversight Council

The Financial Stability Oversight Council is a United States federal government organization established to identify risks to the financial stability of the United States, promote market discipline, and respond to emerging threats to the stability of the U.S. financial system.

Financial Crisis

A financial crisis is a situation where the value of financial institutions or assets drops significantly, leading to a loss of wealth and potentially an economic recession.

Emerging Risks

Potential threats or dangers that are newly developing or becoming more significant in a particular industry or environment.