Question 1
Correct
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22. You formed a portfolio by investing $1200 in asset A which has a beta of 1.25 and $1300 in another asset B. The
beta of your portfolio is 1.146. therefore, the beta of asset B is:
Select one:
1.50
1.05
1.10
1.01
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, Question 2
Correct
24. Expected rate of return of a security is 8% with a beta of 0.92. The risk-free rate is 4% and the market expected
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rate of return is 10%. According to the Capital Asset Pricing Model, this security is
of 1.00
Select one:
Under-priced
Over-priced
Fairly priced
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Question 3
Correct
11. Which of the following statements is NOT TRUE regarding the market portfolio?
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Select one:
It is the tangency point between the capital market line and the indifference curve.
All securities in the market portfolio are held in proportion to their market values.
It includes all publicly-traded financial assets.
It lies on the efficient frontier.
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