Author Question: Your portfolio had a beta of 1.233. The portfolio included two stocks. The first stock had a beta of ... (Read 193 times)

go.lag · **on:** Jul 10, 2018

Your portfolio had a beta of 1.233. The portfolio included two stocks. The first stock had a beta of 0.7 and the second had a beta of 1.1. What were the portfolio weights for each stock?

A) -0.333 in stock 1; 1.333 in stock 2
B) -0.333 in stock 2; 1.333 in stock 1
C) 0.333 in stock 1; 0.667 in stock 2
D) 0.333 in stock 2; 0.667 in stock 1
E) None of the above.

Question 2

What is direct foreign investment? What are the additional risks that a multinational corporation must consider
before undertaking direct investment in a foreign country?

What will be an ideal response?

T4T · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

A

Answer to Question 2

Direct foreign investment is the purchase of plants and equipment in other countries. In addition to business risk and
financial risk, multinational corporations face political risk and exchange risk when investing abroad.