A Portfolio Contains Two Assets

question 97

Multiple Choice

A portfolio contains two assets. The first asset comprises 40% of the portfolio and has a beta of 1.2. The other asset has a beta of 1.5. The portfolio beta is:

• A) 1.35
• B) 1.38
• C) 1.42
• D) 1.50
• E) 1.55

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Definitions:

Restitution

A legal principle requiring a party who has unlawfully benefited at the expense of another to compensate the aggrieved party.

Lost Profits

Represent potential earnings that were not realized due to a breach of contract or other wrongful act.

Out-of-Pocket Rule

A legal principle used to calculate damages based on the actual direct losses and costs incurred by a plaintiff.

Misrepresents

To provide false or misleading representations about something, often with the intention to deceive.