Your Broker Mailed You Your Year-End Statement

question 5

Multiple Choice

Your broker mailed you your year-end statement.You have $25,000 invested in Dow Chemical,$18,000 tied up in GM,$36,000 in Microsoft stock,and $11,000 in Nike.The betas for each of your stocks are 1.55 for Dow,1.12 for GM,2.39 for Microsoft,and .76 for Nike.What is the beta of your portfolio?

• A)1.46
• B)1.70
• C)2.60
• D)0.41

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of its identifiable net assets.

Equity Income

Income earned by an investor from an investment in the stock of a company, typically through dividends and the investment's appreciation in value.

Annual Review

A periodic evaluation process, often yearly, used to assess an individual's or organization's performance, financial state, or the status of a certain project.

Acquisition-Date Fair Value

The estimated market value of an asset or liability at the date a transaction is completed or an acquisition is made.