Stock a Has a Beta of 1

question 41

Multiple Choice

Stock A has a beta of 1.2,Stock B's beta is 1.46,and Stock C's beta is .72.If you invest $2,000 in Stock A,$3,000 in Stock B,and $5,000 in Stock C,what will be the beta of your portfolio?

• A)1.008
• B)1.014
• C)1.038
• D)1.067
• E)1.127

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Definitions:

Heuristic

An educated guess based on prior experiences that helps narrow down the possible solutions for a problem. Also known as a “rule of thumb.”

Means-End Strategy

A problem-solving technique that involves identifying the end goal and then finding the means or steps to reach that goal.

Prototype

An example of a concept that closely matches the defining characteristics of the concept.

Vehicle

A means of transporting goods or individuals from one location to another, such as cars, bikes, and buses.