An investor prefers to invest in companies that have high operating leverage.How can this be accomplished if the investor also requires a portfolio beta of 1.0?
A) Invest 50% in cyclical stocks and 50% in firms with high operating leverage
B) Invest 50% in a market index fund and 50% in firms with high operating leverage
C) Finance part of the portfolio with borrowing
D) Invest a portion of the portfolio in U.S. Treasury securities
Correct Answer:
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