Which of the Following Will Always Lower a Portfolio's Beta

question 26

Multiple Choice

Which of the following will always lower a portfolio's beta?
I.Diversify among different types of securities and across industry and geographic lines.
II.Add investments with low betas to the portfolio.
III.Hold more cash or Treasury Bills in the portfolio.
IV.Reduce the percentage of the portfolio invested in high beta securities.

• A)I, II and IV only
• B)II, III and IV only
• C)I, II and III only
• D)I, II, III and IV

---

Definitions:

Legislative Process

The procedure through which proposed laws are considered and potentially enacted by a legislative body through various stages including drafting, debate, and voting.

Nonprofit Organization

An entity that operates for the benefit of society or a specific group of people and does not distribute its surplus funds to owners or shareholders.

Issue

A topic or problem that is under discussion or over which there are opposing views or disagreements.

Worth

The value of an object, individual, or concept, often characterized by its importance, utility, or monetary valuation.