John Has a Portfolio Consisting of Equal Proportions of 5

question 24

Multiple Choice

John has a portfolio consisting of equal proportions of 5 securities.Susan also has a portfolio of the same five securities but the weights of each security are not equal.Which of the statements below MUST be true?

• A)Because Susan has an unequal distribution of securities,her portfolio beta must be less than John's.
• B)Without additional information,we cannot be certain whose portfolio beta is greater.
• C)Because Susan has an unequal distribution of securities,her portfolio beta must be greater than John's.
• D)Because the portfolios contain the same securities,the beta of each portfolio must be the same.

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