A Portfolio Contains Two Securities and Has a Beta of 1.08.The

question 75

Multiple Choice

A portfolio contains two securities and has a beta of 1.08.The first security comprises 54 percent of the portfolio and has a beta of 1.27.What is the beta of the second security?

• A).79
• B).86
• C).62
• D).82
• E).93

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Definitions:

Substitutes

Goods or services that can be used in place of each other to satisfy consumer needs or desires.

Supply Curve

A graph showing the relationship between the price of a good and the amount of it that producers are willing to sell at each price level.

Market Period

A short duration in which the quantity of goods supplied to the market cannot be changed.

Perishable Good

A type of good that has a limited shelf life and can spoil or become unusable after a certain period, such as food products.