Martin Ortner Holds a $200,000 Portfolio Consisting of the Following

question 56

Multiple Choice

Martin Ortner holds a $200,000 portfolio consisting of the following stocks: $$\begin{array} { c r r } \text { Stock } & \text { Investment } & \text { Beta } \\ \text { A } & \$ 50,000 & 0.95 \\\text { B } & 50,000 & 0.80 \\\text { C } & 50,000 & 1.00 \\\text { D } & 50,000 & 1.20 \\\text { Total } & \$ 200,000 &\end{array}$$ What is the portfolio's beta?

• A)0.938
• B)0.988
• C)1.037
• D)1.089
• E)1.143

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Definitions:

Project Risk

The potential for losing time, quality, or resources in the pursuit of a project’s objectives.

Security Issued

Financial instruments that are offered for sale by a corporation or a government entity, typically in the form of stocks or bonds.

Cost of Equity

The return that investors require for an investment in a company, representing the compensation for the risk taken.

Financing

Allocating resources for the purposes of business ventures, buying goods, or making investments.