Portfolio Beta You Have a Portfolio with a Beta of 0.9.What

question 61

Multiple Choice

Portfolio Beta You have a portfolio with a beta of 0.9.What will be the new portfolio beta if you keep 40 percent of your money in the old portfolio and 60 percent in a stock with a beta of 1.5?

• A)1.00
• B)1.20
• C)1.26
• D)2.40

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Definitions:

Rethinking

The process of revising or reconsidering previously held beliefs, ideas, or strategies.

Framing

A cognitive bias in which people react to a particular choice in different ways depending on how it is presented.

Concept

A mental category that is used to group objects, events, and characteristics.

Heuristic

A simple, efficient rule, whether hard-coded by evolutionary processes or learned, used to make decisions or solve problems.