Suppose Stan Holds a Portfolio Consisting of a $10,000 Investment

question 132

Multiple Choice

Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common stocks.The portfolio's beta is 1.25.Now suppose Stan decided to sell one of his stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35.What would the portfolio's new beta be?

• A) 1.17
• B) 1.23
• C) 1.29
• D) 1.36
• E) 1.43

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Definitions:

Sternum

The long flat bone located in the center of the chest, connected to the rib bones, and helps protect the heart and lungs.

Nasal Septum

The partition made of bone and cartilage separating the nasal cavity into two nostrils.

Ethmoid

A spongy bone located between the eyes that forms part of the nasal cavity and the floor of the cranium.

Maxillary

Pertaining to the maxilla, the upper jawbone in vertebrates.