What is the beta of the investor overall portfolio

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Reference no: EM132064335

1. An investor divides her portfolio into four parts, with 1/4 in Treasury bills, 1/4 in a market index, 1/4 in an asset with beta of 0.8 and 1/4 in an asset with beta of 2.0. What is the beta of the investor's overall portfolio?

A. 0.833

B. 0.950

C. 1.000

D. 1.250

2. Projects A and B are equally risky, mutually exclusive, and have normal cash flows. Project A has an IRR of 12%, while Project B’s IRR is 10%. The two projects have the same NPV when the discount rate is 7%. Which of the following statements is CORRECT?

A. If the discount rate is 10%, both projects will have positive NPVs.

B. If the discount rate is 11%, Project B will have the higher NPV.

C. If the discount rate is 13%, Project A will have the lower NPV.

D. If the discount rate is 14%, both projects will have a negative NPV.

Reference no: EM132064335

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