Table 8.2 You Are Going to Invest $20,000 in a Portfolio Consisting

question 68

Multiple Choice

Table 8.2
You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows:
-What is Nico's portfolio beta if he invests an equal amount in asset X with a beta of 0.60, asset Y with a beta of 1.60, the risk-free asset, and the market portfolio?

• A) 1.20
• B) 1.00
• C) 0.80
• D) 0.60

---

Definitions:

Borrowing Risk

The potential danger that borrowers might not be able to repay their loans or meet other financial obligations, leading to financial loss for the lender.

Accrued Interest

Interest that has been incurred but not yet paid at the end of a period.

Adjusting Entry

An accounting record made to update the financial statements to reflect transactions that have occurred but are not yet recorded.

Interest Expense

The cost incurred by an entity for borrowed funds, usually presented as an expense in the income statement.