You Want Your Portfolio Beta to Be 1

question 54

Multiple Choice

You want your portfolio beta to be 1.3.Currently,the portfolio consists of $100 invested in stock A with a beta of 1.5 and $300 in stock B with a beta of .8.You have another $400 to invest and want to divide it between an asset with a beta of 1.7 and a risk-free asset.How much should you invest in the risk-free asset?

• A)$17.65
• B)$50.25
• C)$200.15
• D)$382.35
• E)$400.00

---

Definitions:

English Philosopher

A scholar specializing in philosophy from England who contributes to discussions and literature in the field of philosophy.

Aggression

A range of behaviors intended to harm or assert dominance over others, which can be physical, verbal, or nonverbal.

Inborn Features

Traits or characteristics present in an individual from birth, resulting from genetic inheritance.

Parasympathetic Nervous System

Part of the autonomic nervous system responsible for rest and digestion, counterbalancing the sympathetic nervous system's fight or flight response.