What Is the Beta of a Portfolio If 40 Percent

question 17

Multiple Choice

What is the beta of a portfolio if 40 percent of the funds invested in the market portfolio are borrowed at the risk-free rate?

• A) 0.60
• B) 0.83
• C) 1.40
• D) 1.67

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Definitions:

General Ledger

A comprehensive record of all financial transactions that occur within a company, organized by account.

Sales Journal

A specialized accounting journal used to record all sales of goods and services on credit.

Sales Revenue

The total amount of money a company receives from its sales of goods or services before any expenses are subtracted.

Cross-Footing

A bookkeeping process that involves checking the mathematical accuracy of figures in financial statements by ensuring that sums of columns and rows respectively match.