Your Portfolio Has a Beta of 1

question 80

Multiple Choice

Your portfolio has a beta of 1.18. The portfolio consists of 25% U.S. Treasury bills,40% in stock A,and 35% in stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of stock B?

• A) 0
• B) 1.42
• C) 1.45
• D) 1.63
• E) 1.87

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Definitions:

Restrictive Trade Practices

Business practices that restrict trade to the detriment of the consumer or competitors.

Competition Tribunal

A specialized court or tribunal that adjudicates matters pertaining to competition law, including antitrust and monopoly issues.

Competition Act

Legislation designed to promote fair business practices and protect consumers by preventing monopolies and promoting competition.

Bid-rigging

A form of fraud in which competitors agree in advance who will win a bidding process, thus undermining the competition.