The Beta of Any Portfolio Can Be Computed as the

question 27

Multiple Choice

The beta of any portfolio can be computed as the

• A) slope of the security market line
• B) sum of the betas for each asset held in the portfolio divided by the number of assets in the portfolio.
• C) the standard deviation of the expected returns of the portfolio minus the risk-free rate.
• D) weighted average of the betas for each asset held in the portfolio.

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Definitions:

Formal Tone

A style of communication that is polite, restrained, and adheres to traditional standards and conventions.

Euphemistic

A manner of expression that uses mild or indirect words or phrases to describe a situation, event, or action, often to avoid causing offense or to mitigate the impact of harsh or blunt reality.

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Tenacious describes an individual or behavior characterized by persistence and determination in pursuing goals or overcoming difficulties.

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