A Portfolio Contains Four Assets

question 61

Multiple Choice

A portfolio contains four assets.Asset 1 has a beta of .7 and represents 35 percent of the portfolio.Asset 2 has a beta of 1.3 and represents 20 percent of the portfolio.Asset 3 has a beta of 1.1 and is 25 percent of the portfolio.Asset 4 has a beta of 2.16.What is the portfolio beta?

• A)1.212
• B)1.264
• C)1.308
• D)1.480
• E)1.642

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Definitions:

Covariation Model

A psychological theory proposing that people determine the cause of an event based on the pattern of covariation between the event and the potential causes across time and circumstances.

Discreteness

Pertains to the characteristic of being separate and distinct in nature, often referring to the classification of data or phenomena into distinct categories.

External Attribution

The process of inferring that a person's behavior is due to situational factors, rather than their own personal characteristics.

Situational Attribution

Attributing a behavior to external factors or the situation in which the behavior occurred.