You Hold a Diversified Portfolio Consisting of $1,000 Investment in Each

question 101

Multiple Choice

You hold a diversified portfolio consisting of $1,000 investment in each of 10 different stocks. The portfolio has a beta of 0.8. You have decided to sell one of your stocks that has a beta equal to 1.1 for $1,000. You will purchase $1,000 of a new stock with a beta of 2.5. After these two transactions (sell and buy) , what will be the beta of the new portfolio?

• A) 1.1
• B) 0.99
• C) 0.87
• D) 0.94

---

Definitions:

Non-Western Philosophy

Philosophical thought that arises outside of the Western tradition, including African, Asian, Indigenous, and other cultural perspectives, offering diverse insights into questions of existence, morality, and society.

Mainstream Western

Refers to the predominant ideas, values, practices, and institutions that have been historically dominant in Western societies, especially in areas such as philosophy, science, and culture.

Noble Birth

Originating from a family of high social rank, typically associated with aristocracy or royalty.

Personal Merit

The value or worth of an individual as determined by their qualities, achievements, or actions, often used as a basis for recognition or reward.