The market portfolio is currently generating a rate of return of 15%. You are an
ID: 2708367 • Letter: T
Question
The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 12%. Based on this information, which one of the following must be true?A The beta of the market portfolio must be 3.0 B Portfolio XYZ is highly affected by swings in the market. C The risk free rate of return must be 3%. D The beta of portfolio XYZ must be less than 1.0 The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 12%. Based on this information, which one of the following must be true?
A The beta of the market portfolio must be 3.0 B Portfolio XYZ is highly affected by swings in the market. C The risk free rate of return must be 3%. B Portfolio XYZ is highly affected by swings in the market. D The beta of portfolio XYZ must be less than 1.0 B Portfolio XYZ is highly affected by swings in the market.
Explanation / Answer
Hi
Please find the answer as follows:
Option D is correct.
Thanks.
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