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.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 6P

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