Sherrie Hymes Holds a $200,000 Portfolio Consisting of the Following

question 15

Multiple Choice

Sherrie Hymes holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.875. $\begin{array}{lrl}\text { Total }&\text { Investment }&\text { Beta }\\\mathrm{A} & \$ 50,000 & 0.50 \\\mathrm{~B} & 50,000 & 0.80 \\\mathrm{C} & 50,000 & 1.00 \\\mathrm{D} & 50,000 & 1.20\\\text { Total }&\$200,000\end{array}$
If Sherrie replaces Stock A with another stock, E, which has a beta of 1.50, what will the portfolio's new beta be?

• A) 1.07
• B) 1.13
• C) 1.18
• D) 1.24
• E) 1.30

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Definitions:

Memory Encoding

The process of converting information into a form that allows it to be stored in the brain.

Memory Trace

The physical record in the nervous system that preserves a memory.

Motivated Forgetting

Motivated forgetting is a psychological process where an individual unconsciously or consciously blocks out painful, embarrassing, or undesirable memories.

Ribot's Law

a principle stating that individuals lose their most recent memories first when they suffer from amnesia.