Question
Bill currently holds a well-balanced portfolio of financial assets. He has just learned that he has inherited some financial assets with a beta value of
Bill currently holds a well-balanced portfolio of financial assets. He has just learned that he has inherited some financial assets with a beta value of zero from his great-uncle. If he is mostly concerned about the riskiness of his portfolio, should Bill keep these assets or should he sell them right away?
Select one:
a. He should sell them and invest the proceeds in an asset with a positive beta.
b. He should get rid of them because they will increase the variability of his portfolio.
c. He should get rid of them because they are worthless and will diminish the value of his portfolio.
d. He should keep them even though they will increase the variability of his portfolio.
e. He should keep them because they are risk-free assets.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started