You Hold the Positions in the Following Table A)1421 Percent
B)16

question 97

Multiple Choice

You hold the positions in the following table. What is the beta of your portfolio? If you expect the market to earn 12 percent and the risk-free rate is 3.5 percent, what is the required return of the portfolio? $$\begin{array} { | l | l | l | l | } \hline & \text { Price } & \text { Shares } & \text { Beta } \\\hline \text { Amazon.com } & \$ 40 & 100 & 3.8 \\\hline \text { Family Dollar Stores } & \$ 30 & 100 & 1.2 \\\hline \text { McKesson Corp } & \$ 50 & 100 & 0.4 \\\hline \text { Schering-Plough Corp } & \$ 20 & 100 & 0.5 \\\hline\end{array}$$

• A)14.21 percent
• B)16.76 percent
• C)13.97 percent
• D)15.38 percent

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Definitions:

Population Standard Deviation

A measure of the dispersion or spread of a set of data points in a population, calculated as the square root of the variance.

Confidence Interval

A spectrum of values obtained from sample data, which has a high probability of encompassing an unknown characteristic of the entire population.

Mean

The mean, often referred to as the average, is a statistic that represents the central or typical value in a set of data, calculated by dividing the sum of all values by the number of values.

Population Standard Error

A measure that estimates the variability of sample means around the population mean if multiple samples were taken from the population.