A Portfolio Contains Two Assets

question 86

Multiple Choice

A portfolio contains two assets.The first asset composes 30% of the portfolio and has a beta of 1.2.The other asset has a beta of 1.5.The portfolio beta is:

• A)1.35
• B)1.38
• C)1.41
• D)1.50
• E)1.55

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Definitions:

Additional Bakers

Implies an increase in the number of bakers in a market or industry, potentially increasing the supply of baked goods.

Local Bakery

A nearby place that specializes in baking and selling bread, pastries, cakes, and other baked goods.

Long-Run Adjustment

Economic processes or actions that firms take over time to adjust to market conditions, including changes in production capacity or entering and exiting markets.

Foreign Competition

The competitive pressure that domestic companies face from products and services offered by foreign entities in the same market.