Consider the Theory of Active Portfolio Management

question 1

Multiple Choice

Consider the theory of active portfolio management. Shares A and B have the same positive alpha and the same non-systematic risk. Share A has a higher beta than share B. You should want ________ in your active portfolio.

• A)equal proportions of Shares A and B
• B)more of Share A than Share B
• C)more of Share B than Share A
• D)more information is needed to answer this question

---

Definitions:

Antidiuretic Hormone

A hormone that regulates the balance of water in the body by reducing the volume of urine made by the kidneys.

Stressful Life Events

Occurrences or circumstances that require significant adjustment, potentially resulting in a strain on physical or mental health.

Stress Level

A measure of the amount of mental or emotional strain or tension a person is experiencing.

Myocardial Infarction

A medical condition that occurs when blood flow decreases or stops to a part of the heart, causing damage to the heart muscle.