12. You want to create a portfolio that is equally invested in a risk-free asset

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12.  You want to create a portfolio that is equally invested in a risk-free asset and two stocks (i.e. 1/3 in each). One stock has a beta of .80. What must be the beta of the second stock, if the portfolio

You want to create a portfolio that is equally invested in a risk-free asset and two stocks (i.e. 1/3 in each). One stock has a beta of .80. What must be the beta of the second stock, if the portfolio's systematic risk is equal to that of the overall market? A. 1.4 B. 1.6 C. 1.8 D. 2.0 E. 2.2 The expected return on a security depends on which of the following? I. Risk-free rate of return II. Amount of the security's unique risk III. Market rate of return IV. Standard deviation of returns A. I and III only B. II and IV only C. II, III, and IV only D. I, III, and IV only E. I, II, III, and IV You want to create a $48,000 portfolio that consists of three stocks and has an expected return of 14.5 percent. Currently, you own $16,700 of Stock A and $24,200 of Stock B. The expected return for Stock A is 18.7 percent, and for Stock B it is 11.2 percent. What is the expected rate of return for Stock C? A. 13.67 percent B. 14.14 percent C. 15.38 percent D. 15.87 percent E. 16.11 percent Adding a security to a portfolio having a beta of 1.4 will increase the portfolio's beta if: A. the security has a beta less than 1.4 B. the security has a beta less than the overall market C. the security has no unsystematic risk. D. the security has a beta greater than 1.4 E. the security has greater total risk than the portfolio.

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12. You want to create a portfolio that is equally invested in a risk-free asset and two stocks (i.e. 1/3 in each). One stock has a beta of .80. What must be the beta of the second stock, if the portfolio

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