Assuming Positive Returns on Treasury Bills, What Can You Assume

question 53

Multiple Choice

Assuming positive returns on Treasury bills, what can you assume about an investor whose diversified portfolio of stocks yielded 25% when the market portfolio yielded 15%?

• A) Treasury bills are offering a 10% yield.
• B) The portfolio beta is greater than 1.0.
• C) The portfolio beta equals 1.67.
• D)The investor's portfolio contains many defensive stocks.

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and the costs necessary to make the sale.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services rendered on credit.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that is not expected to be collected.

Subsidiary Ledger

A ledger that contains accounts of a single type. Example: The accounts receivable subsidiary ledger records all credit customers.