Both Assets B and C Plot on the SML

question 26

Multiple Choice

Both assets B and C plot on the SML.Asset B has a beta of 1.5 and an expected return of 13.1%.Asset C has a beta of 0.60 and an expected return of 7.50%.The risk-free rate is 4% and the expected return on the market portfolio is 11%.If you wish to hold a portfolio consisting of assets B and C,and have a portfolio beta equal to 1.1,what proportion of the portfolio must be in asset C?

• A)0.375
• B)0.444
• C)0.625
• D)0.75

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Definitions:

Single Contact

An individual entry in a contact list, representing a person or organization with whom communication can occur.

Contacts

Information stored about individuals or organizations to facilitate communication, such as names, phone numbers, and addresses.

Mini-Business View

A condensed or summarized perspective of business information or analytics, typically offered within an application or platform for quick insights.

Contacts

The collection of information about individuals or companies stored and managed for communication purposes, often within email or phone applications.