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You Want Your Portfolio Beta to Be 1

Question 109

Multiple Choice

You want your portfolio beta to be 1.20.Currently,your portfolio consists of €100 invested in share A with a beta of 1.4 and €300 in share B with a beta of .6.You have another €400 to invest and want to divide it between an asset with a beta of 1.6 and a risk-free asset.How much should you invest in the risk-free asset?


A) €0
B) €140
C) €200
D) €320
E) €400

Correct Answer:

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