A Portfolio with a Beta of 1.26

question 102

Multiple Choice

A portfolio with a beta of 1.26

• A) is 126% more risky than the overall market.
• B) has less risk than the lowest risk security held within that portfolio.
• C) is 26% more risky than a risk-free asset.
• D) is considerably more risky than the overall market.

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Definitions:

Contribution Margin

The sum of money left over after variable costs are subtracted, which is utilized to pay for fixed costs and to produce a profit.

Production Capacity

The maximum output that a production facility can create over a specified period under normal operating conditions.

Sales Mix

The combination of different products or services that a company sells, characterized by varying profit margins and sales volumes.

Limited Production

A manufacturing strategy where the quantity produced is restricted typically due to scarcity of resources, specialized demand, or strategic choice.