The market portfolio would have a beta of:
A) 0
B) 1
C) 1
D) 0.8

Name: The market portfolio would have a beta of: A) 0 B) 1 C) 1 D) 0.8
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Question

Quizplus · Accepted Answer

The market portfolio by definition has a beta of 1, because it represents the average risk of the entire market. A beta of 0 would imply no risk, and a negative beta is not possible for the market portfolio. A beta of 0.8 would imply that the portfolio is less risky than the market, which is not correct for the market portfolio.

The Market Portfolio Would Have a Beta Of