Question

Question

The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 18%. Based on this information, which one of the following must be true?
A The beta of the market portfolio must be 2.0 B The beta of portfolio XYZ must be greater than 1.0 C Portfolio XYZ is not affected by swings in the market D. The risk fee rate of return must be 3%
Question The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 18%. Based on this information, which one of the following must be true?
A The beta of the market portfolio must be 2.0 B The beta of portfolio XYZ must be greater than 1.0 C Portfolio XYZ is not affected by swings in the market D. The risk fee rate of return must be 3%
Question The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 18%. Based on this information, which one of the following must be true?
A The beta of the market portfolio must be 2.0 B The beta of portfolio XYZ must be greater than 1.0 C Portfolio XYZ is not affected by swings in the market D. The risk fee rate of return must be 3%
The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 18%. Based on this information, which one of the following must be true?
A The beta of the market portfolio must be 2.0 B The beta of portfolio XYZ must be greater than 1.0 C Portfolio XYZ is not affected by swings in the market D. The risk fee rate of return must be 3%
The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 18%. Based on this information, which one of the following must be true?

A The beta of the market portfolio must be 2.0 B The beta of portfolio XYZ must be greater than 1.0 C Portfolio XYZ is not affected by swings in the market D. The risk fee rate of return must be 3%

Explanation / Answer

The answer is "The beta of portfolio XYZ must be greater than 1.0".

If the portfolio were expected to earn the same as the market then they would have the same beta which would be 1. If the portfolio is expected to earn more than the market it has a higher risk level and would have a higher beta.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.