If a Stock Portfolio Replicates the Returns on a Stock

question 92

Multiple Choice

If a stock portfolio replicates the returns on a stock market index, the beta of the portfolio will be

• A)less than 1.
• B)greater than 1.
• C)equal to 0.
• D)equal to 1.
• E)negative.

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Definitions:

Sugar Industry

A sector of the economy focused on the production, processing, and distribution of sugar from sugar cane or sugar beets.

Lesser Antilles

A group of islands in the Caribbean Sea, part of the West Indies, divided into the Leeward Islands and the Windward Islands.

Control

The power to influence or direct people's behavior or the course of events.

Congregationalist Puritans

Members of a group of English Reformed Protestants in the 16th and 17th centuries who sought to "purify" the Church of England from its "Catholic" practices.