Which of the following is the most correct answer for the beta of a portfolio of 35 stocks where the lowest beta for an individual security is 0.84 and the highest is 1.51? a.) The beta of the portfolio must be 1.0 because of the large number of securities in the portfolio. b.) The beta of the portfolio must be less than 1.0 because of the large number of securities in the portfolio. c.)The beta of the portfolio will be between 0 and 1.51. d.)The beta of the portfolio will be between 0.84 and 1.51.
Which of the following is the most correct answer for the beta of a portfolio of 35 stocks where the lowest beta for an individual security is 0.84 and the highest is 1.51? a.) The beta of the portfolio must be 1.0 because of the large number of securities in the portfolio. b.) The beta of the portfolio must be less than 1.0 because of the large number of securities in the portfolio. c.)The beta of the portfolio will be between 0 and 1.51. d.)The beta of the portfolio will be between 0.84 and 1.51.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Which of the following is the most correct answer for the beta of a portfolio of 35 stocks where the lowest beta for an individual security is 0.84 and the highest is 1.51?
a.) The beta of the portfolio must be 1.0 because of the large number of securities in the portfolio.
b.) The beta of the portfolio must be less than 1.0 because of the large number of securities in the portfolio.
c.)The beta of the portfolio will be between 0 and 1.51.
d.)The beta of the portfolio will be between 0.84 and 1.51.
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