You Desire a Portfolio Beta of 1

question 2

Multiple Choice

You desire a portfolio beta of 1.1.Currently,your portfolio consists of $100 invested in Stock A with a beta of 1.4 and $300 in Stock B with a beta of .6.You have another $400 to invest and want to divide it between Stock C with a beta of 1.6 and a risk-free asset.How much should you invest in the risk-free asset to obtain your desired beta?

• A)$50
• B)$100
• C)$125
• D)$350
• E)$300

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Definitions:

Oxidation

A chemical process involving the loss of electrons or an increase in oxidation state by a molecule, atom, or ion.

Chromium

A chemical element with symbol Cr and atomic number 24, known for its high corrosion resistance and hardness.

Organic Product

Compounds primarily composed of carbon atoms, resulting from the synthesis in organic chemistry.

Major Structure

Refers to the principal arrangement or configuration of atoms within a molecule, often determining its chemical behavior.