Your portfolio has a beta of 1.21. The portfolio consists of 35 percent U.S. Treasury bills, 31 percent Stock A, and 34 percent Stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of Stock B?

• A. 1.84
• B. 2.04
• C. 1.47
• D. 2.85
• E. 2.65

Currently, you own a portfolio comprised of the following three securities. How much of the riskiest security should you sell and replace with risk-free securities if you want your portfolio beta to equal 87 percent of the market beta?

Stock	Beta (i)	Value
A	1.13	$13,640
B	1.48	$15,980
C	.85	$23,260

• A. $7,753.51
• B. $8,318.50
• C. $7,811.29
• D. $8,668.24
• E. $7,023.15