Assume the Single-Factor APT Model Applies and a Portfolio Exists

question 39

Multiple Choice

Assume the single-factor APT model applies and a portfolio exists such that half of the funds are invested in risky Security Q and the rest in a risk-free asset.Security Q has a beta of 1.8.The portfolio has a factor beta of:

• A)0.
• B).8.
• C).9.
• D)1.
• E)1.8.

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