Question

You own a portfolio equally invested in a risk-free asset and
two stocks. One of the stocks has a beta of 1.15 and the total
portfolio is equally as risky as the market.

What must the beta be for the other stock in your portfolio?
**(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)**

Beta

Answer #1

The beta of a portfolio is the sum of the weight of each asset times the beta of each asset. If the portfolio is as risky as the market, it must have the same beta as the market. Since the beta of the market is one, we know the beta of our portfolio is one. We also need to remember that the beta of the risk-free asset is zero. It has to be zero since the asset has no risk. Setting up the equation for the beta of our portfolio, we get:

β_{p} = 1.0 = 1/3(0) + 1/3(1.15) +
1/3(β_{X})

Solving for the beta of Stock X, we get:

β_{X} = 1.85

You own a portfolio equally invested in a risk-free asset and
two stocks. One of the stocks has a beta of 1.2 and the total
portfolio is equally as risky as the market.
What must the beta be for the other stock in your portfolio?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)
Beta

4. You own a portfolio equally invested in a risk-free asset and
two stocks. If one of the stocks has a beta of 1.25 and the total
portfolio is equally as risky as the market, what must the beta be
for the other stock in your portfolio.

#5
Bob owns a portfolio that is one-third invested in a risk-free
asset, one-third invested in Stock A and one-third invested in
Stock B. Stock A has a beta of 1.09 and the total portfolio is
equally as risky as the market. What must the beta be for Stock B?
(Do not round intermediate calculations
and round your answer to 2 decimal places, e.g.,
32.16.)

You would like to create a $186,000 portfolio that is equally
invested in a risk-free asset and two stocks. If one of the stocks
has a beta of 2.03 and you want the portfolio to be equally as
risky as the market, what must the beta be for the other stock in
your portfolio?

Jimmy has equally split his investments between a risk-free
asset and two stocks (so Jimmy has 1/3 of his portfolio invested in
each asset). One stock, Stock A, has a beta of 1.56 and the
portfolio's beta is equal to one. What must the beta be for Stock
B, the other stock in Jimmy's portfolio? (Do not round intermediate
calculations. Round your answer to 2 decimal places, e.g., 32.16.)
Stock B's beta is _____.

You want to create a portfolio equally as risky as the market,
and you have $500,000 to invest. Information about the possible
investments is given below: Asset Investment Beta Stock A $ 85,000
.80 Stock B $165,000 1.15 Stock C 1.40 Risk-free asset a. How much
will you invest in Stock C? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.) b. How
much will you invest in the risk-free asset? (Do not round...

You currently own the given below portfolio valued at $76,000.
Your portfolio includes Stock A, Stock B, and a Risk-Free asset.
You want your portfolio to be equally as risky as the market. Given
this information, fill in the rest of the following table? Asset
Value Beta Stock A $13,800 1.21 Stock B ? 1.08 Risk-Free ? ?
Portfolio $76,000 ?
a. What is the Portfolio Beta and the Risk Free Asset Beta?
Note: Do not round your intermediate calculations...

You want to create a portfolio equally as risky as the market,
and you have $1,000,000 to invest. Given this information, fill in
the rest of the following table: (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g.,
32.16.)
Asset Investment Beta
Stock A $165,000 0.80
Stock B $350,000 1.09
Stock C ? 1.27
Risk-Free Asset ? ?

You want to create a
portfolio equally as risky as the market, and you have $1,000,000
to invest. Given this information, fill in the rest of the
following table: (Do not round intermediate calculations.
Round your answers to the nearest whole number, e.g.,
32.)
Asset
Investment
Beta
Stock A
$ 195,000
.90
Stock B
$ 340,000
1.15
Stock C
$
1.29
Risk-free asset
$

You want to create a portfolio equally as risky as the market,
and you have $1,400,000 to invest. Consider the following
information:
Asset
Investment
Beta
Stock A
$420,000
0.90
Stock B
$420,000
1.15
Stock C
1.45
Risk-free asset
Required:
(a)
What is the investment in Stock C? (Do not round your
intermediate calculations.)
(Click to select)$356,855$353,138$371,724$386,593$241,879
(b)
What is the investment in risk-free asset? (Do not
round your intermediate calculations.)
(Click to select)$188,276$318,121$178,862$180,745$195,807

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