Suppose You Hold a Portfolio Consisting of a $10,000 Investment

question 32

Multiple Choice

Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks.The portfolio's beta is 1.25.Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35.What would the portfolio's new beta be?

• A)1.17
• B)1.23
• C)1.29
• D)1.36
• E)1.43

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Definitions:

Flashbulb Memory

A vivid and detailed memory of a significant moment.

Characteristics

Distinctive traits or qualities that define an individual, object, or phenomenon.

Psychologists

Professionals specialized in the study of the mind and behavior, often dealing with how people think, feel, and behave.

Encoding Specificity Hypothesis

The theory that memory is most effectively recalled when the context at the time of encoding matches the context at the time of retrieval.