You Are Considering a Portfolio of Three Shares with 30

question 70

Multiple Choice

You are considering a portfolio of three shares with 30% of your money invested in company X,45% of your money invested in company Y,and 25% of your money invested in company Z.If the betas for each share are 1.22 for company X,1.46 for company Y,and 1.03 for company Z,what is the portfolio beta?

• A)1.24
• B)1.00
• C)1.28
• D)1.33

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Definitions:

Return On Assets

A profitability ratio that measures how efficiently a company can manage its assets to produce net income.

Debt-To-Equity Ratio

A gauge for the synergy of debt and equity in the financing framework of a company’s assets.

Current Ratio

This ratio evaluates the ability of a business to meet its short-term liabilities by utilizing its current assets.

Quick Ratio

A gauge of a business's capability to cover its short-term debts using its most readily accessible assets.