An Investor Wishes to Invest Equal Amounts in Three Stocks

question 60

Multiple Choice

An investor wishes to invest equal amounts in three stocks and to achieve a portfolio beta of 1.2.If stock A has a beta of 0.9 and stock B has a beta of 1.1,what must be the beta of stock C?

• A) 0.7
• B) 1.6
• C) 1.2
• D) 1.8

---

Definitions:

Terrorism

The use of violence and threats to intimidate or coerce, especially for political purposes.

Warrants

Financial securities that grant the holder the right to buy shares of a company at a fixed price until the expiry date.

Exclusionary Rule

A legal principle in the United States that prevents evidence collected or analyzed in violation of the defendant's constitutional rights from being used in a court of law.

Probable Cause

A reasonable basis for believing that a crime may have been committed, which is a standard used in law to justify searches, arrests, and issuing warrants.