Question

6. Steve Brickson currently has an investment portfolio that contains four stocks with a total value...

6. Steve Brickson currently has an investment portfolio that contains four stocks with a total value equal to $80,000. The portfolio has a beta (b) equal to 2.3. Steve wants to invest an additional $20,000 in a stock that has b = 4.5. After Steve adds the new stock to his portfolio, what will be the portfolio's beta?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common...
Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.25. Now suppose Stan decided to sell one of his stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 0.94. What would the portfolio's new beta be? Select the correct answer. a. 1.14 b. 1.19 c. 1.24 d. 1.34 e. 1.29
Your investment club has only two stocks in its portfolio. $50,000 is invested in a stock...
Your investment club has only two stocks in its portfolio. $50,000 is invested in a stock with a beta of 0.9, and $75,000 is invested in a stock with a beta of 1.7. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
A mutual fund manager has a $20 million portfolio with a beta of 1.5. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of 1.5. The risk-free rate is 4.5%, and the market risk premium is 5.5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund’s required return to be 13%. What should be the average beta of the new stocks added to the portfolio?
PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 1.50....
PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 1.50. The risk-free rate is 6.50%, and the market risk premium is 4.5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 17%. What should be the average beta of the new stocks added to the portfolio? Do not round intermediate calculations....
A mutual fund manager has a $20 million portfolio with a beta of 1.55. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of 1.55. The risk-free rate is 3.00%, and the market risk premium is 4.5%.  The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks.  After investing the additional funds, she wants the fund's required return to be 18%.  What should be the average beta of the new stocks added to the portfolio? Round your answer to two decimal places.
Collette has four different stocks in her portfolio. She owns 79 shares of Stock A with...
Collette has four different stocks in her portfolio. She owns 79 shares of Stock A with a market price of $41.00, 137 shares of Stock B which is currently at $66.00 per share, 163 shares of Stock C which is listed at $87.00 per share, and 259 shares of Stock D, with a price of $75.00 per share. If the betas and returns for the four stocks are as follows, What is Collette ’s portfolio beta and portfolio return? Stock...
Your investment club has only two stocks in its portfolio. $50,000 is invested in a stock...
Your investment club has only two stocks in its portfolio. $50,000 is invested in a stock with a beta of 0.8, and $30,000 is invested in a stock with a beta of 2.0. What is the portfolio's beta? AA Corporation's stock has a beta of 1.1. The risk-free rate is 4%, and the expected return on the market is 13%. What is the required rate of return on AA's stock? Do not round intermediate calculations. Round your answer to two...
A mutual fund manager has a $20 million portfolio with a beta of 0.75. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of 0.75. The risk-free rate is 4.25%, and the market risk premium is 4.5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 16%. What should be the average beta of the new stocks added to the portfolio? Do not round intermediate calculations. Round your...
Jimmy has equally split his investments between a risk-free asset and two stocks (so Jimmy has...
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 _____.
IV. You currently hold a diversified portfolio with a beta of 1.1. The value of your...
IV. You currently hold a diversified portfolio with a beta of 1.1. The value of your investment is $500,000. The risk-free rate is 3%, the expected return on the market is 8%. a) Using the CAPM, calculate the expected return on your portfolio. b) Suppose you sell $10,000 worth of Chevron stock (which is currently part of the portfolio) with a beta of 0.8 and replace it with $10,000 worth of JP Morgan stock with a beta of 1.6. What...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT