You Invest 55% of Your Money in Security a with a Beta

question 67

Multiple Choice

You invest 55% of your money in security A with a beta of 1.4 and the rest of your money in security B with a beta of 0.9. The beta of the resulting portfolio is

• A) 1.466.
• B) 1.157.
• C) 0.968.
• D) 1.082.
• E) 1.175.

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Definitions:

Fear Appeal

A type of persuasive communication that influences behavior on the basis of arousing fear instead of rational analysis of the issues.

Rational Analysis

A systematic, logical evaluation of information or concepts to form a judgment or conclusion.

Prejudice

Preconceived opinion or bias against an individual or group without sufficient knowledge, rational reason, or actual experience.

Discrimination

In conditioning, the tendency for an organism to distinguish between a CS and similar stimuli that do not forecast a UCS.