How would you build a well-diversified portfolio how many


1. Which one of the following statements is correct concerning a portfolio beta?

A) The beta of a portfolio of U.S. Treasury Bills is +1.0.

B) The beta of the market portfolio is equal to 0.

C) Portfolio betas range between -1.0 and +1.0.

D) The portfolio beta is the weighted average of the betas of the securities in the portfolio.

E) To compute a portfolio beta, you must know the correlations between all pairs of securities in the portfolio.

2. How would you build a well-diversified portfolio? How many individual investments does it take?

3. Suppose you bought a 12 percent coupon bond one year ago for $870. The bond sells for $945 today. Assuming a face value of $1,000, what is your percentage return over the past year?

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Financial Management: How would you build a well-diversified portfolio how many
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