Portfolio a Has a Beta of

question 27

Multiple Choice

Portfolio A has a beta of .2 and an expected return of 14%. Portfolio B has a beta of .5 and an expected return of 16%. The risk-free rate of return is 10%. If you manage a long-short equity fund and want to take advantage of an arbitrage opportunity, you should take a short position in portfolio ________ and a long position in portfolio ________.

• A) A; A
• B) A; B
• C) B; A
• D) B; B

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Definitions:

Accepting Vesicles

Vesicles that receive transported materials within the cell, often involved in processes like endocytosis and exocytosis.

Golgi Complex

An organelle found in most eukaryotic cells, involved in the modification, sorting, and packaging of proteins for secretion or use within the cell.

Cis Face

The side of the Golgi apparatus where substances enter from the endoplasmic reticulum for processing.

Medial Region

Pertaining to or situated in the middle; the central part of an organism or structure.