Tom O'Brien Has a 2-Stock Portfolio with a Total Value

question 32

Multiple Choice

Tom O'Brien has a 2-stock portfolio with a total value of $100,000.$65,000 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42.What is his portfolio's beta? Do not round your intermediate calculations.Round your final answer to 2 decimal places.

• A) 0.94
• B) 0.98
• C) 0.88
• D) 0.90
• E) 1.15

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Definitions:

Car Loan

A financial loan specifically used to purchase a car, typically secured by the car itself as collateral.

Periodic Rate

The interest rate applied to a financial loan or savings account that is compounded at regular intervals over a period of time.

Effective Rate

The actual interest rate an individual pays on a loan or earns on an investment, after compounding and other charges are factored in.

Credit Card

A plastic card issued by a bank or financial institution allowing the holder to purchase goods or services on credit.