If Equity A's Beta on the Inflation Factor Is 1

question 1

Multiple Choice

If equity A's beta on the inflation factor is 1.2,equity B's is 2.6 and equity C's is 3,a portfolio that has weights of 0.5 on equity A,0.3 on equity B and 0.2 on equity C has a factor beta of _____ on this factor.

• A)1
• B)1.98
• C)6.8
• D)3

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Definitions:

Component

A component or segment of a more extensive whole, particularly a section of machinery or a system.

Consequent

In a conditional statement, it refers to the outcome or result that follows from the fulfillment of a precedent condition.

Conditional

A type of logical statement that connects two statements in a cause-and-effect relationship, usually formulated as "if-then."

Biconditional

A logical statement indicating a true conditional statement and its converse are true; often represented by the phrase "if and only if".