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If a well-diversified portfolio of stocks has an expected return of 15% when the expected return on the market portfolio...

If a well-diversified portfolio of stocks has an expected return of 15% when the expected return on the market portfolio is 10%, then

Multiple Choice

  • Treasury bills are offering a 7% yield.

  • The portfolio beta is greater than 1.0.

  • The portfolio beta equals 1.67.

  • The investor's portfolio contains many defensive stocks.

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Answer #1

please find below the solution.. let me know if you need any clarification..

correct answer is option : The portfolio beta is greater than 1.0.

If the portfolio expected return is higher than the market portfolio return therefore this means that portfolio beta is higher than the >1. Correct answer is option The portfolio beta is greater than 1.0.

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