What Is the Beta of a Three-Stock Portfolio Including 25

question 90

Multiple Choice

What is the beta of a three-stock portfolio including 25% of stock A with a beta of .90,40% of stock B with a beta of 1.05,and 35% of stock C with a beta of 1.73?

• A) 1.0
• B) 1.17
• C) 1.22
• D) 1.25

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Definitions:

Curvilinear Cost

A cost behavior pattern where costs increase with activity, but not at a constant rate, often depicted as a curved line on a graph.

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a company.