What Happens to Expected Portfolio Return If the Portfolio Beta

question 28

Multiple Choice

What happens to expected portfolio return if the portfolio Beta increases from 1.0 to 1.5, the risk-free rate decreases from 5% to 4%, and the market risk premium increases from 8% to 9%?

• A)it increases from 12% to 14%.
• B)it increases from 13% to 17.5%.
• C)it increases from 14% to 21%.
• D)it remains unchanged.

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Definitions:

Southern Siberia

A geographic region in Russia, known for its vast steppes, mountains, and forests, located south of the Siberian arctic tundra.

Burin

A sharp tool or engraving implement used in prehistoric times and by artists to carve or etch on hard materials.

Mousterian Tool Tradition

The tool industry of the Neandertals and their contemporaries of Europe, Southwest Asia, and North Africa from 40,000 to 125,000 years ago.

Pressure-Flaking

A technique used in stone tool making where materials are shaped by the application of pressure to flake off small pieces.