You Want to Design a Portfolio That Has a Beta

question 67

Multiple Choice

You want to design a portfolio that has a beta of zero.Stock A has a beta of 1.69 and Stock B's beta is also greater than 1.You are willing to include both stocks as well as a risk-free security in your portfolio.If your portfolio will have a combined value of $5,000,how much should you invest in Stock B?

• A)$2,630
• B)$0
• C)$2,959
• D)$3,008
• E)$1,487

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Definitions:

Technology

The application of scientific knowledge for practical purposes, particularly in industry and in our daily lives, encompassing both tangible tools and intangible software.

High Quality Living

A standard of life characterized by health, comfort, happiness, and access to necessary and luxury goods and services, often tied to economic prosperity.

Degree of Agency

The extent to which an individual or entity has the ability to act independently and make their own free choices.

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The process of storing goods, processing orders, and distributing products to consumers in an efficient and timely manner from a warehouse.