13. A stock with a Beta of 0.86 means A·The stock is 14% less profitable than th

Question

13. A stock with a Beta of 0.86 means A·The stock is 14% less profitable than the SP500, B. The stock has a P/E of 0.86. C. When the SP500 goes down 1%, the stock goes down 14% on average. D. When the SPS00 goes down 1%, the stock goes down 0.86% on average 14, Over 98% of all stock portfolio managers in the US: A. Deliver positive Beta. B. Deliver position Alpha. C. Do not beat their benchmark. D. Deliver positive Alpha le portfolios, where Questions 15-20 refer to the following graph of risk vs. return for a basket of possib each lettered point represents a different portfollio. The shaded area represents all portfolios. Expected return 6.0% 2.35% .. 0% Risk 15. Which portfolio is infeasible? A. C B. E C. G D. all of the above are feasible 16. Which portfolio has the highest return? A. A B. B C. C D. D

Explanation / Answer

Answer 13) I f the Beta of a stock is 0.86 it means the if the market goes down by 1% the stock goes down by 0.86% on an average. Option d

since beta measures the sentivity of stock with the market. The beta of market is alway taken as 1

Answer 14) Over 98% of all stock porfolio managers in the U.S fail to beat their bench marks.

Answer option c)

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