QUESTION 15

1. Portfolio X has a weighted beta coefficient of 1.5 and Portfolio Y has a weighted beta coefficient of 0.8. Both portfolios are expected to earn the same weighted average expected return. With these assumptions, which of the following statements is correct?

   		a. Portfolio X is preferred because it has a higher beta.
   		b. Portfolio X is preferred because it has a higher standard deviation.
   		c. Portfolio Y is preferred because it has a lower beta.
   		d. Portfolio Y is preferred because it has a lower standard deviation.

QUESTION 16

1. Which of the following statements about beta is correct?

   		a. Correlation between a portfolio and the market does not impact the calculation of beta.
   		b. The implications of beta are not affected by the coefficient of determination between a portfolio and the market.
   		c. Beta measures all types of risk
   		d. None of the above are correct.