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

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Definitions:

Basing-Point Pricing

A pricing strategy where the price of goods includes transportation costs from a specific location, regardless of the actual shipment origin.

Deceptive Pricing

Pricing practices intended to mislead or trick consumers about the actual cost of a product or service.

Federal Trade Commission

A United States government agency aimed at promoting consumer protection and eliminating harmful anti-competitive business practices.

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Laws that have been enacted by a government or legislative body.