The Beta of an Active Portfolio Is 1

question 45

Multiple Choice

The beta of an active portfolio is 1.36. The standard deviation of the returns on the market index is 22%. The nonsystematic variance of the active portfolio is 1.2%. The standard deviation of the returns on the active
Portfolio is

• A) 3.19%.
• B) 31.86%.
• C) 42.00%.
• D) 27.57%.
• E) 2.86%.

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Definitions:

Primitive Variables

Primitive variables in computer programming are basic data types that hold values such as integers, booleans, and floating-point numbers, and are not objects.

Constant Variables

Variables whose values cannot be changed once they have been set initially, typically defined using final or const keywords.

Inner Class

A class defined within another class, used to handle the complexity of larger code structures by logically grouping classes that are only used in one place.

Outer Class

In Java, a class that is not nested within another class and may contain nested classes (inner classes) within it.