A Portfolio Consists of Two Stocks and Has a Beta

question 33

Multiple Choice

A portfolio consists of two stocks and has a beta of 1.25.The first stock has a beta of 1.02 and comprises 30 percent of the portfolio.What is the beta of the second stock?

• A) 0.41
• B) 0.66
• C) 0.82
• D) 1.28
• E) 1.35

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