You Hold a Portfolio Consisting of a $5,000 Investment in Each

question 15

Multiple Choice

You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks.The portfolio beta is equal to 1.12.You have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.00) .What is the new beta of the portfolio?

• A) 1.1139
• B) 1.1700
• C) 1.2311
• D) 1.2927
• E) 1.3573

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Definitions:

Groupthink

A psychological phenomenon where the desire for harmony in a decision-making group results in an irrational or dysfunctional decision outcome.

Organizational Communication

The process of creating, exchanging, and interpreting messages within a network of interdependent entities.

Approaches

Refers to the different methods or strategies adopted in tackling problems, tasks, or studies in various fields.

Communication Process

The transfer and understanding of meaning between individuals or groups, involving a sender, message, medium, receiver, and feedback.