You Are Considering a Portfolio of Three Stocks with 30

question 29

Multiple Choice

You are considering a portfolio of three stocks with 30% of your money invested in company X, 45% of your money invested in company Y, and 25% of your money invested in company Z. If the betas for each stock are 1.22 for company X, 1.46 for company Y, and 1.03 for company Z, what is the portfolio beta?

• A) 1.24
• B) 1.00
• C) 1.28
• D) 1.33

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Definitions:

Stare Decisis

A legal doctrine that obligates courts to follow historical cases when making a ruling on a similar case.

Common Law Rule

A principle based on judicial decisions and customary practices rather than written laws.

Government Agency

An organization that is part of the government and conducts specific activities or services according to legal regulations.

Separation of Powers

A foundational principle of governance in which the state's powers are divided among distinct branches, typically the legislative, executive, and judiciary, to prevent abuse of power.