The Beta of an Active Portfolio Is 1

question 15

Multiple Choice

The beta of an active portfolio is 1.36. The standard deviation of the returns on the market index is 22%. The nonsystematic variance of the active portfolio is 1.2%. The standard deviation of the returns on the active portfolio is

• A) 3.19%.
• B) 31.86%.
• C) 42.00%.
• D) 27.57%.
• E) 2.86%.

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Definitions:

Dopamine

A neurotransmitter involved in many functions, including motivation, reward, attention, and movement control, often associated with the pleasure and reward system of the brain.

Serotonin

Serotonin is a neurotransmitter that plays a key role in regulating mood, sleep, appetite, and pain.

Anterior Cingulate Cortex

A part of the brain located in the frontal lobe, involved in a wide range of cognitive and emotional functions, including decision-making, empathy, impulse control, and emotion.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension.