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

question 31

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 0.25 and β_Mwas 0.21,the β of the portfolio would be approximately ________.

• A)0.64
• B)1.19
• C)1.25
• D)1.56
• E)none of the above

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Definitions:

Risk Factor

An aspect or variable associated with an increased likelihood of developing a disease or injury.

Violence

Behavior involving force intended to hurt, damage, or kill someone or something.

Civilly Committed

A legal process by which individuals with certain mental illnesses or disorders can be mandated to receive treatment or care, typically in a secure facility, without their consent, for their own well-being and for public safety.

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The legal and ethical principle that individuals, especially those with mental or physical illnesses, have the right to receive appropriate and adequate medical care and treatment.