A Portfolio of Securities Has a Beta of 1

question 52

Multiple Choice

A portfolio of securities has a beta of 1.14.Given this,you know that:

• A) adding another security to the portfolio must lower the portfolio beta.
• B) the portfolio has more risk than a risk-free asset but less risk than the market.
• C) each of the securities in the portfolio has more risk than an average security.
• D) the portfolio has 14 percent more risk than a risk-free security.
• E) the expected return on the portfolio is greater than the expected market return.

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