The Beta of a Portfolio

question 38

Multiple Choice

The beta of a portfolio

• A) does not change over time.
• B) is irrelevant, only the betas of the individual assets are important.
• C) is the weighted average of the betas of the individual assets in the portfolio.
• D) is the sum of the betas of all assets in the portfolio.

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Definitions:

Plant Improvement Loans

Loans specifically aimed at financing the upgrades or expansion of physical industrial facilities to enhance productivity or capacity.

Second Mortgage

A loan taken out on a property that is already mortgaged, with the second loan being subordinate to the first.

Trade Credit

A type of commercial financing in which a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date.

Line of Credit

A flexible loan from a bank or financial institution that offers a borrower a maximum amount of money they can borrow over a specified time period.