Assume That the Single Factor APT Model Applies and a Portfolio

question 11

Multiple Choice

Assume that the single factor APT model applies and a portfolio exists such that 2/3 of the funds are invested in Security Q and the rest in the risk-free asset. Security Q has a beta of 1.5. The portfolio has a beta of:

• A) 0.00.
• B) 0.50.
• C) 0.75.
• D) 1.00.
• E) 1.50.

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Definitions:

Pure Tones

Sounds with a sinusoidal waveform, meaning they have a steady, uninterrupted oscillation and a single frequency.

Complex Sounds

Audio signals that contain a mixture of frequencies, often perceived as more textured or rich than simple tones.

Psychological Dimension

An aspect of mental or emotional states that can influence behavior and perception.

Timbre

The quality of a sound that distinguishes different types of sound production, such as voices or musical instruments.