Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question 3
Consider an individual investing in just one company. Assume they own all the equity and all the debt of the company and that the company has only one project. Then
O The beta of their portfolio will be larger than the beta of the project, since the portfolio is not well diversified
O The beta of their portfolio will be larger than the beta of the project, since one should adjust for leverage
O The beta of their portfolio will be the same as the beta of the project
O It is not possible to say whether the beta of their porfolio will be larger than, smaller than, or equal to the beta of the project
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Transcribed Image Text:Question 3 Consider an individual investing in just one company. Assume they own all the equity and all the debt of the company and that the company has only one project. Then O The beta of their portfolio will be larger than the beta of the project, since the portfolio is not well diversified O The beta of their portfolio will be larger than the beta of the project, since one should adjust for leverage O The beta of their portfolio will be the same as the beta of the project O It is not possible to say whether the beta of their porfolio will be larger than, smaller than, or equal to the beta of the project
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