You Own a Portfolio Equally Invested in a Risk-Free Asset

question 42

Multiple Choice

You own a portfolio equally invested in a risk-free asset and two stocks.One of the stocks has a beta of 1.9 and the total portfolio is equally as risky as the market.What is the beta of the second stock?

• A)0.75
• B)0.80
• C)0.94
• D)1.00
• E)1.10

---

Definitions:

Open-Book Management

A management approach where financial information is shared with employees to involve them in understanding how their actions affect the company's performance.

Stock Ownership

The holding of shares in a company, giving the shareholder a claim on part of the company’s assets and profits.

Family And Medical Leave Act

A United States labor law requiring covered employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons.

Workforce Diversity

Refers to the inclusion of individuals with a wide range of characteristics and experiences, such as cultural background, gender, age, and abilities, within a company's employees.