Portfolio a Has a Beta of 0

question 36

Multiple Choice

Portfolio A has a beta of 0.2 and an expected return of 14%.Portfolio B has a beta of 0.5 and an expected return of 16%.The risk-free rate of return is 10%.If you manage a long/short equity fund and wanted to take advantage of an arbitrage opportunity,you should take a short position in portfolio ______ and a long position in portfolio __________.

• A) A; A
• B) A; B
• C) B; A
• D) B; B

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Definitions:

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Facilities dedicated to helping individuals recover from various conditions, including substance abuse, physical injuries, or mental health issues, through a structured program of therapy and support.

Self-confidence

The belief in one's own abilities or qualities, boosting one's courage to take action.

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A systematic evaluation or analysis of a particular process, situation, or individual, often used to determine needs, preferences, or abilities.

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