A Portfolio Consists of Two Stocks and Has a Beta

question 41

Multiple Choice

A portfolio consists of two stocks and has a beta of 1.07.The first stock has a beta of 1.48 and comprises 38 percent of the portfolio.What is the beta of the second stock?

• A).41
• B).66
• C).82
• D)1.28
• E)1.35

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Definitions:

Interest Rates

The cost of borrowing money or the return earned from lending money, often expressed as a percentage of the principal.

Aggregate Demand

The aggregate need for various products and services across an economy at varying price points, throughout a particular timeframe.

Stock Market

A public marketplace for buying and selling shares of publicly traded companies, serving as a platform for investors to invest in businesses.

Aggregate Demand

Entire consumption desire for goods and services within an economy, calculated based on a specific price level over an agreed-upon period.