What Happens to Expected Portfolio Return If the Portfolio Beta

question 28

Multiple Choice

What happens to expected portfolio return if the portfolio Beta increases from 1.0 to 1.5, the risk-free rate decreases from 5% to 4%, and the market risk premium increases from 8% to 9%?

• A)it increases from 12% to 14%.
• B)it increases from 13% to 17.5%.
• C)it increases from 14% to 21%.
• D)it remains unchanged.

---

Definitions:

Uniformity

The consistency and evenness of something, such as product quality, across different units or batches.

Dispersion

The extent to which a set of values is spread out or dispersed around a central value, such as the mean.

Statistical Control

The use of statistical methods to monitor and control a process to ensure that it operates at its full potential, producing consistent, conforming products with minimal waste.

Design Specifications

Detailed descriptions of the materials, dimensions, and quality standards necessary to build a product.