USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Consider the Three

question 15

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Consider the three stocks, stock X, stock Y, and stock Z, that have the following factor loadings (or factor betas) .
The zero-beta return ( $\lambda$ 0) = 3 percent, and the risk premia are $\lambda$ 1 = 10 percent and $\lambda$ 2 = 8 percent. Assume that all three stocks are currently priced at $50.
-Refer to Exhibit 7.9. Assume that you wish to create a portfolio with no net wealth invested. The portfolio that achieves this has 50 percent in stock X, -100 percent in stock Y, and 50 percent in stock Z. The weighted exposure to risk factor 2 for stocks X, Y, and Z are

• A) 0.50, -1.0, 0.50.
• B) -0.50, 1.0, -0.50.
• C) 0.60, -0.85, 0.25.
• D) F-0.275, 0.10, 0.175.
• E) 0.40, -0.75, 0.25.

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Definitions:

Growth Stage

A phase in a company's or product's life cycle characterized by rapid revenue and customer base expansion.

Distribution Channels

Pathways through which a product or service passes until it reaches the end consumer, often involving intermediaries like wholesalers, retailers, or distributors.

Promotional Element

A component of a marketing strategy focused on communicating the value of a product or service to potential customers to increase awareness and sales.

Product Characteristic

Specific attributes or features that define a product and distinguish it from competitors.