Your Portfolio Is Comprised of 40 Percent of Stock X,15

question 44

Multiple Choice

Your portfolio is comprised of 40 percent of stock X,15 percent of stock Y,and 45 percent of stock Z.Stock X has a beta of 1.16,stock Y has a beta of 1.47,and stock Z has a beta of 0.42.What is the beta of your portfolio?

• A)0.87
• B)1.09
• C)1.13
• D)1.18
• E)1.21

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Definitions:

Trading of Securities

The act of buying, selling, or exchanging financial instruments such as stocks, bonds, and options in the financial markets.

Institutional Investors

Organizations that invest large sums of money into securities and assets, including mutual funds, pension funds, insurance companies, and endowments.

Mutual Funds

Investment vehicles made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

Pension Funds

Investment pools that pay for workers' retirements. Contributions are made by employers, employees, or both, and the funds are invested on the employees' behalf.