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Assume the Single-Factor Model Applies and a Portfolio Exists Such

Question 32

Multiple Choice

Assume the single-factor model applies and a portfolio exists such that 65 percent of the funds are invested in risky Security Q and the rest in the risk-free asset.Security Q has a beta of 1.5.The portfolio has a beta of:


A) 1.500.
B) .925.
C) .650.
D) .975.
E) 1.000.

Correct Answer:

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