Multiple Choice
You own a portfolio which is invested equally in two stocks and a risk-free security.The stock betas are 0.89 for Stock A and 1.26 for Stock B.Which one of the following will increase the portfolio beta,all else constant?
A) increasing the amount invested in the risk-free security
B) decreasing the weight of Stock B and increasing the weight of Stock A
C) replacing Stock A with a security that has a beta of .77
D) increasing the weight of Stock A and decreasing the weight of the risk-free security
E) replacing Stock B with Stock C, which has a beta equal to that of the market
Correct Answer:
Verified
Correct Answer:
Verified
Q7: Which one of the following must be
Q58: A portfolio consists of two stocks and
Q59: A risky security has a variance of
Q60: A portfolio consists of one risky asset
Q61: Western Exports stock has a standard deviation
Q64: Home Interior's stock has an expected return
Q65: What is the covariance of security A
Q66: A stock has a standard deviation of
Q68: The following portfolio has an expected return
Q84: All else held constant, which of the