You Would Like to Combine a Risky Stock with a Beta

question 39

Multiple Choice

You would like to combine a risky stock with a beta of 1.8 with U.S. Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in Treasury bills?

• A) 25%
• B) 44%
• C) 50%
• D) 62%
• E) 78%

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Definitions:

Southern Blacks

African Americans who reside in the Southern United States, a group that historically has faced significant racial segregation and inequality.

Urban Working Class

Refers to the group of people, especially in industrial or urban areas, who work in manual or low-wage jobs and often live in less affluent conditions.

Suburban Middle Class

A socioeconomic group characterized by moderate to above-average income families living in suburban areas outside of urban city centers.

Freedom Summer

A 1964 voter registration drive aimed at increasing the number of registered black voters in Mississippi, part of the larger civil rights movement.