The Beta for the Risk-Free Investment Is Closest To

question 3

Multiple Choice

The beta for the risk-free investment is closest to:

• A)1.
• B)0.
• C)Unable to answer this question without knowing the risk-free rate.
• D)Unable to answer this question without knowing the market's volatility.

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Definitions:

Subgroup Comparability

The ability to make meaningful comparisons between different subgroups within a larger group, often used in statistical and research contexts.

Portfolio Durations

A measure of the sensitivity of the price of a portfolio to a change in interest rates, often used to manage interest rate risk.

Comparison Universe

A set of similar investment options or benchmarks used for evaluating the performance or characteristics of a specific investment.

Jensen Measure

A performance evaluation method that measures the excess returns a portfolio generates over its expected return, given its level of market risk.