Question

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? |

Answer #1

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?

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.

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 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...

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...

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

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...

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...

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