In a Portfolio of Risky Assets,the Portfolio's Response to Any

question 20

Multiple Choice

In a portfolio of risky assets,the portfolio's response to any factor,F_i,can be determined by:

• A)multiplying the portfolio weighted average β_i by the factor F_i.
• B)computing the portfolio weighted average F_i.
• C)multiplying the CAPM beta times the factor.
• D)summing the weighted random errors.
• E)dividing the percentage change in the factor,F_i,by the total number of factors affecting the portfolio.

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Definitions:

Cash Dividend

A cash distribution of earnings by a corporation to its shareholders.

Note Payable

Note payable is a written promise to pay a specified amount of money, often with interest, by a certain date, serving as a formal loan agreement between a borrower and a lender.

Factory Equipment

Durable goods or machinery used in manufacturing processes, typically involving production or maintenance tasks.

Indirect Method

A type of cash flow reporting in financial statements where net income is adjusted for changes in balance sheet accounts to calculate the cash flow from operating activities.