Suppose You Held a Well-Diversified Portfolio with a Very Large

question 57

Multiple Choice

Suppose you held a well-diversified portfolio with a very large number of securities,and that the single index model holds.If the β of your portfolio was 0.20 and β_Mwas 0.16,the β of the portfolio would be approximately ________.

• A)0.64
• B)0.80
• C)1.25
• D)1.56
• E)none of the above

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Definitions:

Ray-Finned Fishes

A diverse group of fishes known for their fins which are supported by long, bony rods arranged in a ray pattern.

Vertebrate Jaw

A structural feature found in vertebrates that is composed of bony or cartilaginous structures surrounding the mouth, utilized for biting, chewing, and manipulation of food.

Amphibians

A class of cold-blooded vertebrates that live both in water and on land, such as frogs and salamanders.

Fishes

Aquatic vertebrates that have gills throughout life and limbs, if any, in the shape of fins.