Suppose Stan Holds a Portfolio Consisting of a $10, 000

question 53

Multiple Choice

Suppose Stan holds a portfolio consisting of a $10, 000 investment in each of 8 different common stocks.The portfolio's beta is 1.25.Now suppose Stan decided to sell one of his stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35.What would the portfolio's new beta be?

• A) 1.17
• B) 1.23
• C) 1.29
• D) 1.36
• E) 1.43

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Definitions:

Self-correcting Feedback

A process through which systems adjust and refine themselves based on responses from their environment or actions.

Creativity

The ability to produce original and unusual ideas, or to make something new or imaginative.

Self-leadership

The practice of intentionally influencing your thinking, behavior, and feelings to achieve your objectives.

Constructive Thought Patterns

Models to help us to form positive and productive ways of thinking that can benefit our performance.