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

question 60

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 σ of your portfolio was 0.25 and σ_M was 0.21, the β of the portfolio would be approximately ________.

• A) 0.64
• B) 1.19
• C) 1.25
• D) 1.56

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Definitions:

Frontal Part

Referring to the frontal lobe of the brain, responsible for complex cognitive functions, emotional regulation, and decision making.

Brain Development

Refers to the process of growth and maturation of the brain, involving changes in structure, function, and connectivity that occur throughout life, especially in the early years.

Myelination

The process of forming a myelin sheath around the nerves to enable faster transmission of electrical signals within the nervous system.

Axons

Long, slender projections of nerve cells that transmit electrical impulses away from the neuron's cell body.