The Beta of an Active Portfolio Is 1

question 42

Multiple Choice

The beta of an active portfolio is 1.45.The standard deviation of the returns on the market index is 22%.The nonsystematic variance of the active portfolio is 3%.The standard deviation of the returns on the active portfolio is

• A)36.30%.
• B)5.84%.
• C)19.60%.
• D)24.17%.
• E)26.0%.

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Definitions:

Shared Mental Models

The common understanding or knowledge shared among members of a team or group, facilitating coordination and effective communication.

Shared Status

A situation where members of a group or individuals possess equal rank and privileges within a social or organizational context.

Self-managed Work Groups

Teams that operate without direct supervision, taking collective responsibility for task management, decision making, and problem solving.

Specialized Roles

Positions or tasks within an organization or team that require specific skills, knowledge, or expertise unique to that role.