You Hold a Diversified $100,000 Portfolio Consisting of 20 Stocks

question 57

Multiple Choice

You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each.The portfolio's beta is 1.12.You plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.50.What will the portfolio's new beta be? Do not round your intermediate calculations.

• A) 1.093
• B) 1.185
• C) 1.127
• D) 1.150
• E) 1.242

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Definitions:

Situational Leadership

A leadership style that proposes the most effective leadership varies with the level of the followers’ readiness or development.

Coaching Style

A way of leading, instructing, or guiding individuals or teams to improve performance and achieve goals.

Participating Style

A leadership or management approach that actively involves team members in decision-making processes and problem-solving tasks.

Delegating Style

A management approach where authority and tasks are transferred to subordinates or team members.