If You Hold a Portfolio Made Up of the Following

question 23

Multiple Choice

If you hold a portfolio made up of the following stocks:

What is the beta of the portfolio?

• A) 1.33
• B) 1.24
• C) 1.15
• D) 1.00

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Definitions:

Bretton Woods Agreement

The Bretton Woods Agreement was established in 1944 to set up a new international monetary system, creating exchange rate stability and promoting international economic cooperation.

Exchange Rates

The value of one currency expressed in terms of another currency, which determines how much foreign currency can be exchanged for a unit of domestic currency.

Gold Convertibility

The ability to convert a currency directly into gold, a system which provides a measure of security and confidence in a currency's value.

Managed Float

A currency exchange rate policy where a country's central bank intervenes occasionally to change the direction or the pace of change of a currency's value, without specific target levels.