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What is the beta of a portfolio that is invested 25 percent in the market portfolio, 25 percent in an asset with twice as much systematic risk as the market portfolio and the rest in a risk-free asset?

Question:

What is the beta of a portfolio that is invested 25 percent in the market portfolio, 25 percent in an asset with twice as much systematic risk as the market portfolio and the rest in a risk-free asset?

A.

0.25

B.

0.50

C.

0.75

D.

1.00

Answer» c. 0.75

Note: The above multiple-choice question is for all general and Competitive Exams in India