A Stock Has a Beta of 1

question 35

Multiple Choice

A stock has a beta of 1.2 and an expected return of 17 percent.A risk-free asset currently earns 5.1 percent.The beta of a portfolio comprised of these two assets is 0.85.What percentage of the portfolio is invested in the stock?

• A)71 percent
• B)77 percent
• C)84 percent
• D)89 percent
• E)92 percent

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Definitions:

Utterances

Spoken words, statements, or vocal sounds that convey meaning and are a fundamental unit of speech in linguistics.

Imitation

The act of copying or mimicking the actions, speech, or behavior of others as a method of learning or social interaction.

Indirect Commands

Instructions or commands that are not expressed directly, often used in communication to suggest or imply what should be done without stating it openly.

Grammatical Errors

Mistakes made in the use of grammar, affecting the correctness and clarity of sentences.