You have $100,000 invested. Of that, $50,000 is invested in IVM stock which has a beta of 1.4, $30,000 is invested in UBM stock with a beta of 1.2, and the remainder is invested in T-Bills. Which of the following is true? (Hint: T-Bills are generally considered risk-free, therefore, their beta must be …)
A. You have 30% of your portfolio invested in T-Bills.
B. Your portfolio has no diversifiable risk since it has T-Bills in it.
C. Your portfolio’s overall beta is 1.06.
D. Your portfolio is less volatile than the overall market since it has T-Bills.