Question
Ed Lawrence has invested $100,000. Of that, $30,000 is invested in IBM stock, $25,000 is invested in T-bills, and the remainder is invested in corporate
Ed Lawrence has invested $100,000. Of that, $30,000 is invested in IBM stock, $25,000 is invested in T-bills, and the remainder is invested in corporate bonds. Which of the following is true regarding his portfolio? a. Ed has 30% of his portfolio invested in stocks. b. Ed has 55% of his portfolio invested in corporate bonds. c. If IBM has a beta less than one, the portfolio must have a beta greater than one. d. Ed has 70% of his portfolio invested in risk-free assets. e. Changes in the return on IBM stock will have the greatest impact on changes in the portfolio return.
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