The following information is to be used to answer questions 13-17.
$\begin{array}{llcc}
\underline{ \text { SD }} &\underline{ \text {Beta }}&\underline{ \text {alpha }}&\underline{ \text { $\mathrm{R}^{2}$}} \
\text { Fund 11.97 } &1.0&1.3&0.95\
\text { Fund 22.94 } &0.8&0.6^*&0.80\
\text { Fund 33.82} &1.2&-3.5&0.90\
\text { Fund 44.70 } &1.4&4.2&065\
&\
\end{array}$
$\text { *Significant at the } 5 \text { percent level }$
-Which of these four funds had the largest market risk?
A) Fund 1 Solution: Fund 4 has the highest beta.
B) Fund 2
C) Fund 3
D) Fund 4

Question

The following information is to be used to answer questions 13-17.
 $\begin{array}{llcc}
\underline{ \text { SD }} &\underline{ \text {Beta }}&\underline{ \text {alpha }}&\underline{ \text { $\mathrm{R}^{2}$}}  \
 \text { Fund 11.97 } &1.0&1.3&0.95\
 \text { Fund 22.94 } &0.8&0.6^*&0.80\
 \text {  Fund 33.82} &1.2&-3.5&0.90\
 \text { Fund 44.70 } &1.4&4.2&065\
 &\
\end{array}$
$\text { *Significant at the } 5 \text { percent level }$
-Which of these four funds had the largest market risk?
A) Fund 1 Solution: Fund 4 has the highest beta.
B) Fund 2
C) Fund 3
D) Fund 4

Quizplus · Accepted Answer

Beta is a measure of market risk, and Fund 4 has the highest beta of 1.4, indicating it has the largest market risk among the four funds.

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