Table 8.2
You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows:
-If you expect the market to increase which of the following portfolios should you purchase?
A) A portfolio with a beta of 1.9.
B) A portfolio with a beta of 1.0.
C) A portfolio with a beta of 0.
D) A portfolio with a beta of -0.5.

Question

Table 8.2
You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows: 
-If you expect the market to increase which of the following portfolios should you purchase?
A) A portfolio with a beta of 1.9. 
B) A portfolio with a beta of 1.0. 
C) A portfolio with a beta of 0. 
D) A portfolio with a beta of -0.5.

Quizplus · Accepted Answer

When the market is expected to increase, investing in a portfolio with a high beta (such as 1.9) is more appropriate as it tends to outperform the market during bullish periods. Therefore, portfolio A with a beta of 1.9 will likely yield higher returns than other portfolios.

Table 8.2 You Are Going to Invest $20,000 in a Portfolio Consisting