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3 years ago

A portfolio with a beta of 1.26

Business

1 answer:

Vanyuwa [196]3 years ago

7 0

Answer:

The answer is C: is considerably more risky than the overall market.

Explanation:

The beta of a portfolio is the weighted sum of the individual asset betas, According to the proportions of the investments in the portfolio. A beta of “1” indicates that its volatility is like the benchmarks. A number higher than “1” indicates more volatility, while lower numbers indicate more price stability. Diversification can help make your portfolios less volatile, allowing you to see steady growth without seeing wild swings in the value of your savings.

A zero-beta portfolio is a portfolio constructed to have zero systematic risk or, in other words, a beta of zero. A zero-beta portfolio would have the same expected return as the risk-free rate.

Investors can determine the volatility of their whole portfolios by examining the beta of each holding. The calculation is simply a matter of adding up the beta for each stock and adjusting according to how much of each you own (weighted average).

In this case, the answer is: is considerably more risky than the overall market. A beta of 1,26 is 126% more risky than a free risk option, and 26% more risky than the overall market. It depends on the investor's resilience to risk whether the difference with the overall market is considerable or not.

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Answer:

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Explanation:

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Answer:

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Answer:

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Answer:

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Explanation:

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