What Is the Beta of a Portfolio with an Expected

question 77

Multiple Choice

What is the Beta of a portfolio with an expected return of 12% if Treasury bills yield 6% and the market risk premium is 8%?

• A)0.50
• B)0.75
• C)0.90
• D)1.50

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Definitions:

Operating Capacity

The maximum output that a company can produce under normal conditions over a specific period.

Differential Cost

Differential cost, also known as incremental cost, is the difference in total cost that will result from selecting one option over another in decision-making processes.

Unused Capacity

Represents the available production or service facility capability that is not being utilized to its full potential.

Condensed Income Statement

A simplified financial statement that highlights a company's revenues, expenses, and profits over a specific period, omitting detailed line items.