You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.12 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
a. 1.37
b. 1.54
c. 1.88
d. 1.98
e. 2.97
Answer: c. 1.88
?P = 1 = (1/3)(0) + (1/3)(1.12) + (1/3)(x)x = 1.88
You might also like to view...
Explain the term "hedonic adaptation."
What will be an ideal response?
Product adoption is the process by which a consumer or business customer begins to buy and use a new good, service, or idea
Indicate whether the statement is true or false
Critics of the laws which restrict the wearing of burkas, hijabs and other religious attire cite numerous arguments as to why the restrictions are harmful to the right of freedom of religion. Which argument below represents the proponents view?
a. The restrictions allow individuals to not be burdened by religious customs in the workplace b. The restrictions promote a secular society and therefore quarantee equality in the public arena c. The restrictions are necessary to maintain religious customs d. The restrictions are necessary to avoid health and safety hazards
Evetts (2000) identified three explanatory theories for why women’s careers could be considered as different from men. They are ______.
a. biological dimensions, structural dimensions and cultural dimensions b. structural dimensions, cultural dimensions and action dimensions c. cultural dimensions, biological dimensions and action dimensions d. structural dimensions, action dimensions and biological dimensions