A Portfolio Contains Four Assets

question 4

Multiple Choice

A portfolio contains four assets.Asset 1 has a beta of .8 and composes 20% of the portfolio.Asset 2 has a beta of 1.1 and composes 20% of the portfolio.Asset 3 has a beta of 1.5 and composes 30% of the portfolio.Asset 4 has a beta of 1.6 and composes the remaining 30% of the portfolio.If the riskless rate is expected to be 3% and the market risk premium is 6%,what is the beta of the portfolio?

• A)0.80
• B)1.10
• C)1.19
• D)1.25
• E)1.31

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Definitions:

Corporate Law

The body of law that governs the formation, operation, regulation, and dissolution of corporations, aiming to ensure the legality of commercial transactions and the protection of shareholders.

Possessions Worth

The total value or worth of all the assets that an individual owns, including money, real estate, and personal belongings.

Wealth Inequality

The unequal distribution of assets among residents of a country or the world, leading to disparities in wealth and economic opportunities.

Income Inequality

The unequal distribution of individual or household income across the various participants in an economy, contributing to varying levels of wealth within a society.