Stryker Industries received an offer from an exporter for 28,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price $23
Unit manufacturing costs:
Variable 10
Fixed 5

The amount of profit or loss from acceptance of the offer is a:

c) Without additional information, we cannot be certain whose portfolio beta is greater.

Explanation:

When comparing portfolios of the same security composition but different weights we need to know the beta of each security in order to make a valid comparism between the two securities.

Beta is defined as a measure of the volatility of a security compared to the whole market. It considers the systemic risk and the expected returns from a security or portfolio.

In determining beta we compare against a particular benchmark.

Since more information is not given on the securities and their weights in the two portfolios we cannot determine which one has a higher beta.