Investments
Response to the following question:
You are going to invest $20,000 in a portfolio consisting of assets X, Y, Z as follows:
Asset Annual Return probability beta proportion
X 10% 0.50 1.2 0.333
Y 8% 0.25 1.6 0.333
Z 16% 0.25 2.0 0.333
The beta of the portfolio containing X Y Z is
A. 2.0
B. 2.4
C. 1.6
D. 1.5
The beta of this portfolio indicates:
A. has more risk then market
B. has same risk as market
C. has an undetermined amount of risk compared to market
D. has less risk than the market