Sherrie Hymes Holds a $200,000 Portfolio Consisting of the Following

question 65

Multiple Choice

Sherrie Hymes holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.875. If Sherrie replaces Stock A with another stock, E, which has a beta of 1.50, what will the portfolio's new beta be?

• A) 1.07
• B) 1.13
• C) 1.18
• D) 1.24
• E) 1.30

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Definitions:

Miller

Refers to George A. Miller, a cognitive psychologist best known for his theory regarding the limit of short-term memory capacity, often summarized as "seven, plus or minus two" pieces of information.

Memory Capacity

Memory capacity refers to the amount of information that can be stored in the memory system at any given time.

Sensory Register

The component of memory that holds incoming sensory information for a very short period of time, almost like a snapshot.

Duration

The length of time that something continues or exists.