Author Question: Market risk refers to the tendency of a stock to move with the general stock market. Which of the ... (Read 76 times)

jmoore1989 · **on:** Aug 7, 2023

Question 1

Keith Johnson has $100,000 invested in a two-stock portfolio: $40,000 is invested in Potts Manufacturing and the remainder is invested in Stohs Corporation. Potts’s beta is 1.70 and Stohs’s beta is 0.50. What is the portfolio’s beta?

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0.74

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0.98

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1.12

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1.35

Question 2

Market risk refers to the tendency of a stock to move with the general stock market. Which of the following best describes a stock with a below-average market risk?

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it will tend to be less volatile than an average stock and its beta will be less than 1.0

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it will tend to be less volatile than an average stock and its beta will be greater than 1.0

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it will tend to be less volatile than an average stock and its beta will be equal to 1.0

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it will tend to be less volatile than an average stock and its beta will be greater than 1.0 and less than 1.5

athenaheim · **Reply #1 on:** Aug 7, 2023

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