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

question 32

Multiple Choice

Assume the single-factor model applies and a portfolio exists such that 65 percent of the funds are invested in risky Security Q and the rest in the risk-free asset.Security Q has a beta of 1.5.The portfolio has a beta of:

• A)1.500.
• B).925.
• C).650.
• D).975.
• E)1.000.

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Definitions:

Impulse Control

Impulse control refers to the ability to delay gratification and resist the temptation to perform an immediate action or decision that may not be beneficial in the long run.

Prolonged Drinking

Refers to the continuous or extended consumption of alcoholic beverages over a long period, which can lead to health issues and addiction.

Stomach Enzyme

Proteins found in the stomach that are crucial for the digestion of food, breaking down complex molecules like proteins into simpler forms.

Morphine Derivatives

Compounds chemically related to morphine, often used for their analgesic (pain-relieving) properties.