You Currently Own a Stock Portfolio That Has a Beta

question 22

Multiple Choice

You currently own a stock portfolio that has a beta of 1.2.If you fully hedge your stock portfolio you will effectively change the portfolio's beta to which one of the following?

• A) 0
• B) 1
• C) 1 / 1.2
• D) 1.2
• E) 1.2²

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Definitions:

Alfred Binet

A French psychologist best known for developing one of the first intelligence tests.

John Watson

An American psychologist who established the psychological school of behaviorism.

Heredity

The process by which physical or mental qualities are genetically handed down from one generation to the next.

Human Intelligence

Human intelligence is the cognitive capability to learn, understand, apply knowledge, solve problems, and adapt to new situations.