You Would Like to Combine a Risky Stock with a Beta

question 105

Multiple Choice

You would like to combine a risky stock with a beta of 1.68 with U.S.Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market.What percentage of the portfolio should be invested in the risky stock?

• A)32 percent
• B)40 percent
• C)54 percent
• D)60 percent
• E)68 percent

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Pertaining to sight or seeing, often used in the context of graphical elements or aids that enhance understanding or appeal.

Confidence

The feeling or belief that one can rely on someone or something; firm trust.

Authority

The power or right to give orders, make decisions, and enforce obedience, often within a specific domain or organization.

Aesthetic Aspects

Elements related to beauty or the appreciation of beauty, especially in art or design.