You Are Managing a Portfolio of 10 Stocks Which Are

question 69

Multiple Choice

You are managing a portfolio of 10 stocks which are held in equal amounts.The current beta of the portfolio is 1.64,and the beta of Stock A is 2.0.If Stock A is sold,what would the beta of the replacement stock have to be to produce a new portfolio beta of 1.55?

• A) 1.10
• B) 1.00
• C) 0.90
• D) 0.75
• E) 0.50

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Definitions:

Oceans

Large bodies of saltwater that cover approximately 71% of the Earth's surface, playing a critical role in climate regulation and supporting diverse marine life.

Thermohaline Conveyor

A mostly deep-water ocean current driven by density differences that are caused by variations in temperature and salinity.

Saline Water

Water that contains a significant amount of dissolved salts, typically found in oceans and saltwater lakes.

Cold Currents

Ocean currents that move cold water from polar or temperate regions towards the equator, influencing regional climates and marine ecosystems.