You Would Like to Combine a Risky Stock with a Beta

question 1

Multiple Choice

You would like to combine a risky stock with a beta of 1.5 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) 33%
• C) 50%
• D) 67%
• E) 75%

---

Definitions:

Secondary Sex Characteristics

Nonreproductive sexual traits, such as female breasts and hips, male voice quality, and body hair.

Conversation

The informal exchange of ideas, information, and thoughts between two or more people, either verbally or in written form.

Mixed-age

An environment or grouping that includes individuals of different ages, often used in educational settings to enhance learning and social development.

Social Connectedness

The feeling of belonging and having close personal ties with others, contributing to one’s well-being.