Question

Suppose you hold a diversified portfolio consisting of a $8,950 invested equally |

in each of 20 different common stocks. The portfolio’s beta is 1.42. Now |

suppose you decided to sell one of your stocks that has a beta of 1.4 and to |

use the proceeds to buy a replacement stock with a beta of 1.3. What would |

the portfolio’s new beta be? |

Answer #1

Suppose you hold a diversified portfolio consisting of a $5,396
investment
in each of 10 different common stocks. The
portfolio’s beta is 0.83. Now
suppose you decided to sell one of your stocks that has a beta
of 1 and to
use the proceeds to buy a replacement stock with a beta of
1.7. What would
the portfolio’s new beta be?

Suppose you hold a diversified portfolio consisting of a $12,356
invested equally
in each of 10 different common stocks. The
portfolio’s beta is 1.39. Now
suppose you decided to sell one of your stocks that has a beta
of 1 and to
use the proceeds to buy a replacement stock with a beta of
1. What would
the portfolio’s new beta be?
1.19
1.49
1.39
1.09
1.29
The risk-free rate is 3 percent. Stock A has a beta =
1.3 and Stock B has...

Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 1.39. Now suppose you decided to sell one of the stocks in
your portfolio with a beta of 1.0 for $7,500 and use the proceeds
to buy another stock with a beta of 1.10. What would your
portfolio's new beta be? Do not round intermediate calculations.
Round your answer to two decimal places.

Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 2.12. Now suppose you decided to sell one of the stocks in
your portfolio with a beta of 1.0 for $7,500 and use the proceeds
to buy another stock with a beta of 1.31. What would your
portfolio's new beta be? Do not round intermediate calculations.
Round your answer to two decimal places.

You hold a diversified portfolio consisting of many different
common stocks with a total market value of $100,000. The portfolio
beta is equal to 1.15. You have decided to sell one of your stocks,
a lead mining stock whose beta is equal to 0.5 , for $10,000 net
and to use the proceeds to buy $10,000 of stock in a steel company
whose beta is equal to 1.3 . What will be the new beta of the
portfolio? (Round to...

PORTFOLIO BETA
Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 1.55. Now suppose you decided to sell one of the stocks in
your portfolio with a beta of 1.0 for $7,500 and use the proceeds
to buy another stock with a beta of 0.82. What would your
portfolio's new beta be? Do not round intermediate calculations.
Round your answer to two decimal places.

PORTFOLIO BETA
Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 1.25. Now suppose you decided to sell one of the stocks in
your portfolio with a beta of 1.0 for $7,500 and use the proceeds
to buy another stock with a beta of 1.19. What would your
portfolio's new beta be? Do not round intermediate calculations.
Round your answer to two decimal places.

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

Given the following probability distribution, what are the
expected return and the standard
deviation of returns for Security J?
State Pi rj
1 0.2 12%
2 0.3 4%
3 0.5 17%
Group of answer choices
12.10%; 5.93%
12.30%; 5.63%
12.40%; 5.63%
12.30%; 5.93%
12.10%; 5.63%
Suppose you hold a diversified portfolio consisting of a $6,485
invested equally
in each of 20 different common stocks. The
portfolio’s beta is 0.81. Now
suppose you decided to sell one of your stocks that has a beta
of 1.4 and to
use the proceeds...

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...

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