Your Present Portfolio Is If You Wish to Change the Proportion Of

question 3

Multiple Choice

Your present portfolio is
$\begin{array} { l c l l } \text { Security } & \text { Sensitivity } & \text { Proportion } & \text { Expected Return } \\ \mathrm { X } & 2 & .4 & 16 \% \\ \mathrm { Y } & .7 & .4 & 10 \% \\ \mathrm { Z } & 1.2 & .2 & 12 \% \end{array}$
If you wish to change the proportion of $Z$ from $.2$ to $.4$ , the resulting arbitrage portfolio would change the portfolio return by

• A) -.06%.
• B) +.21%.
• C) +.04%.
• D) +.6%

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Definitions:

Individual Differences

Variations among individuals in their behavior, cognition, personality, and other attributes, due to genetic, environmental, and developmental factors.

Behaviorist School

A school of psychology that focuses on observing and controlling behavior through environmental stimuli and responses.

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