You Have a Portfolio Consisting of 20% Boeing (Beta =

question 44

Multiple Choice

You have a portfolio consisting of 20% Boeing (beta = 1.3) and 40% Hewlett-Packard (beta = 1.6) and 40% McDonald's stock (beta = 0.7) . How much market risk does the portfolio have?

• A) This portfolio has 18% less risk than the general market.
• B) This portfolio has 28% more risk than the general market.
• C) This portfolio has 18% more risk than the general market.
• D) This portfolio has 28% less risk than the general market.

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Definitions:

Variability

The measure of how data points in a statistical distribution or dataset diverge from the average or mean value.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, commonly exemplified by the mean, median, or mode.

Placebo Effect

The phenomenon where patients experience a perceived or actual improvement in their condition solely because they believe they are receiving treatment.

Ineffectual Treatment

A therapy or intervention that does not produce the desired beneficial outcome for the condition it was intended to address.