You Would Like to Combine a Risky Stock with a Beta

question 39

Multiple Choice

You would like to combine a risky stock with a beta of 1.8 with U.S. Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in Treasury bills?

• A) 25%
• B) 44%
• C) 50%
• D) 62%
• E) 78%

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Definitions:

Absorbent Dressing

A type of medical dressing designed to absorb bodily fluids from wounds, promoting a suitable environment for healing.

Full-thickness Repair

A surgical technique that involves the complete repair of all layers of a damaged tissue or organ.

Maturation

Genetically determined biological plan for growth and development. Physical growth and motor development are a function of maturation.

Proliferative

Relating to the rapid multiplication of cells or tissue.