Jenna Holds a Diversified $100,000 Portfolio Consisting of 20 Stocks

question 117

Multiple Choice

Jenna holds a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each.The portfolio's beta is 1.12.Jenna plans to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.80.What will the portfolio's new beta be?

• A) 1.286
• B) 1.255
• C) 1.224
• D) 1.194
• E) 1.165

---

Definitions:

McCarthy Era

A period in the early 1950s in the United States characterized by heightened fears of communist influence and widespread accusations of subversion and treason.

Individualism

A social theory favoring freedom of action for individuals over collective or state control.

CIO

An abbreviation for the Congress of Industrial Organizations, a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955.

Communist Members

Individuals who are part of a political party or movement advocating for communism, a system where property is owned by the community and each person contributes and receives according to their ability and needs.