Bob and Mary own the same assets in each of their portfolios.Each has a different allocation of their investments across the various securities contained in the portfolio.The portfolios of Bob and Mary must have equal betas because they are investing in the same securities,just in different proportions.

Question

Quizplus · Accepted Answer

Beta is a measure of the volatility of an asset in relation to the overall market. The allocation of investments across different securities can affect the beta of a portfolio. Therefore, even though Bob and Mary may own the same assets, their allocation of investments may result in different betas for their portfolios.

Bob and Mary Own the Same Assets in Each of Their