What can you assume about an investor whose diversified portfolio of stocks yielded 25% when the market portfolio yielded 15%?
A)Treasury bills are offering a 10% yield
B)The portfolio Beta is greater than 1.0
C)The portfolio Beta equals 1.67
D)The investor's portfolio contains many defensive stocks

Question

Quizplus · Accepted Answer

A diversified portfolio yielding 25% when the market portfolio yielded 15% indicates that the portfolio has outperformed the market, implying a high Beta (systematic risk) in the portfolio. Therefore, choice B is the best answer. The other choices are not necessarily related to the given information.

What Can You Assume About an Investor Whose Diversified Portfolio