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16. Portfolio AB’s beta is closest to: a. 0.80 b. 0.92 c. 1.00 d.
Assume the risk free rate is 2.0%. The SP500 is considered the market. Today (T-0), you invest $400 in Stock A and $600 in Stock B to create Portfolio A,B. Assume there are not taxes or dividends. The one year performance of the stocks and the market is summarized in the table below. Use this information to help answer questions 16-20. Total Return 12.0% 18.0% 10.0% Total Risk 14,0% 15.0% 12.0% Investment Beta Market Stock A Stock B 1.00 400 600 0.60 16. Portfolio A,B’s beta is closest to: a. 0.80 b. 0.92 c. 1.00 d. 1.08 e. 1.20
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16. Portfolio AB’s beta is closest to: a. 0.80 b. 0.92 c. 1.00 d.
x16. Portfolio AB’s beta is closest to: a. 0.80 b. 0.92 c. 1.00 d.
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