Jenna Holds a Diversified $100,000 Portfolio Consisting of 20 Stocks

question 117

Multiple Choice

Jenna holds a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each.The portfolio's beta is 1.12.Jenna plans to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.80.What will the portfolio's new beta be?

• A) 1.286
• B) 1.255
• C) 1.224
• D) 1.194
• E) 1.165

---

Definitions:

Practical

Refers to an approach or solution grounded in reality, focusing on effectiveness and feasibility rather than theoretical perfection.

Dotted Line

A line made up of small, repeated dots, often used to indicate borders, boundaries, or suggested paths that are not physically marked.

Broken Line

A line that is not continuous but consists of a series of dashes, often used in drawings to represent hidden, unseen, or imaginary boundaries or features.

Partial View

A drawing or representation focusing on a specific section or portion of an object, omitting the rest for clarity or simplicity.