A Portfolio with a Beta of 1.06

question 77

Multiple Choice

A portfolio with a beta of 1.06

• A) is 106% more risky than the overall market.
• B) has less risk than the lowest risk security held within that portfolio.
• C) is 6% more risky than a risk-free asset.
• D) is slightly more risky than the overall market.

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Definitions:

Rule Against Perpetuities

A legal principle that restricts the ability to control property through a will or trust indefinitely, ensuring that property is not tied up for generations beyond the lives of people living at the time the will or trust is created.

Charitable Trust

A trust established for charitable purposes, benefiting the public or a segment of it, and possessing special tax considerations.

Testamentary Trust

A trust that is created according to the instructions left in a deceased person's will and goes into effect upon their death.

Died Intestate

The situation where a person passes away without having made a legal will.