Portfolio AB Was Created by Investing in a Combination of Stocks

question 132

Multiple Choice

Portfolio AB was created by investing in a combination of Stocks A and B. Stock A has a beta of 1.2 and a standard deviation of 25%. Stock B has a beta of 1.4 and a standard deviation of 20%. Portfolio AB has a beta of 1.25 and a standard deviation of 18%. Which of the following statements is CORRECT?

• A) stock a has more market risk than stock b but less stand-alone risk. a.
• B) portfolio ab has more money invested in stock a than in stock b.
• C) portfolio ab has the same amount of money invested in each of the two stocks.
• D) portfolio ab has more money invested in stock b than in stock a.
• E) stock a has more market risk than portfolio ab.

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Definitions:

Values Across Generations

The differing beliefs, priorities, and ethics that are important to people from different age groups, affecting workplace dynamics and expectations.

Cultural Intelligence

The ability to connect and function proficiently in diverse cultural settings.

Culturally Diverse Environments

Settings where individuals or groups from different cultural, ethnic, or national backgrounds interact and work together.

Loose Cultures

Cultures that have less strict norms and rules and allow for a wider variety of behavior and beliefs among their members.