You Are Given the Following Information About a Portfolio You

question 8

Multiple Choice

You are given the following information about a portfolio you are to manage. For the long term, you are bullish, but you think the market may fall over the next month. $$\begin{array} { l r r } \text { Portfolio Value } & \$ \quad 1 \text { million } \\\text { Portfolio's Beta } & 0.86 \\\text { Current S\&P500 Value } & 990 \\\text { Anticipated S\&P500 Value } & 915 \\\end{array}$$ If the anticipated market value materializes, what will be your expected loss on the portfolio?

• A) 7.58%
• B) 6.52%
• C) 15.43%
• D) 8.57%
• E) 6.42%

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Definitions:

Decimal

A number representing a fraction or a whole number using a point to separate the whole part from the fractional part.

Fraction

A mathematical expression representing the division of one integer by another, written in the form \(a/b\).

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A mathematical expression that compares two or more quantities, showing the relative sizes of two or more values.

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