Question
1.Your portfolio is invested 25% in McDonalds stock, 25% in Tiffany & Co. stock, 25% in an S&P 500 market index fund (like SPY), and
1.Your portfolio is invested 25% in McDonalds stock, 25% in Tiffany & Co. stock, 25% in an S&P 500 market index fund (like SPY), and 25% in a bank savings account.The CAPM betas for McDonalds and Tiffany are 0.67 and 1.88, respectively.Which is the best estimate of the beta of your entire portfolio?
a.0.72
b.0.89
c.1.00
d.1.45
e.It cannot be determined
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
16th edition
1337902608, 978-1337902601
