Question
QUESTION 15 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
QUESTION 15
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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
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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.
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Intermediate Accounting 2014 FASB Update
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
15th edition
978-1118938782, 111893878X, 978-1118985311, 1118985311, 978-1118562185, 1118562186, 978-1118147290
