If portfolio A has a beta of +1.50 and portfolio Z has a beta of negative 1.50, what do the two valuesindicate? If the return on the market rises by 20%, whatimpact, ifany, would this have on the returns from portfolios A andZ? Explain.

If portfolio A has a beta of +1.50 and portfolio Z has a beta of negative 1.50,

Portfolio A

Portfolio Z

__________ would be 1.50 times as responsive to themarket, while

portfolio A

portfolio Z

_____ would also be 1.50 times asresponsive, but in the opposite direction.(Select from thedrop-down)

If the return on the market rises by 20%, whatimpact, ifany, would this have on the returns from portfolios A andZ?(Select the best answerbelow.)

A.The return of portfolio A will increase by 20.0%, while the return of portfolio Z will decrease by 20.0%.

B.The return of portfolio A will decrease by 20.0%, while the return of portfolio Z will increase by 20.0%.

C.The return of portfolio A will decrease by 30.0% while the return of portfolio Z will increase by 30.0%.

D.The return of portfolio A will increase by 30.0%, while the return of portfolio Z will decrease by 30.0%.