Consider a portfolio with four stocks. $32,209 is invested in stock A with beta 1.98. $15,729...

Consider a portfolio with four stocks. $32,209 is invested in stock A with beta 1.98. $15,729 is invested in stock B with beta 0.57. $19,267 is invested in stock C with beta 0.96. $4,425 is invested in stock D with beta 2.02. What is the beta of the portfolio?

Please put exact answer

Expert Solution

The beta of a portfolio is the weighted average beta of the securities which constitute the porfolio

Stock	Investment	Weight	Beta	*WeightBeta**
A	32,209	0.45	1.98	0.89
B	15,729	0.22	0.57	0.13
C	19,267	0.27	0.96	0.26
D	4,425	0.06	2.02	0.12

Portfolio Beta = Weight*Beta

= .89+.13+.26+.12

= 1.40

jeff jeffy answered 2 years ago

PORTFOLIO BETA An individual has $45,000 invested in a stock with a beta of 0.8 and...

PORTFOLIO BETA An individual has $45,000 invested in a stock with a beta of 0.8 and another $30,000 invested in a stock with a beta of 2.5. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.

what is the beta of a three-stock portfolio including $2500 invested in stock A with a...

what is the beta of a three-stock portfolio including $2500 invested in stock A with a beta of .90, $4000 invested in stock B with a beta of 1.05, and $3500 invested in stock C with beta of 1.73?

Beta if a portfolio. the beta of four stocks G, H, I and J are 0.47,...

Beta if a portfolio. the beta of four stocks G, H, I and J are 0.47, 0.87, 1.18 and 1.65, respectively. what is the beta of a portfolio with the following weights in each asset? weightG. weight H weight I weight J portfolio 1. 25% 25% 25% 25% portfolio 2. 30% 40% 20% 10% portfolio 3. 10% 20% 40% 30% what is the beta of portfolio 1?

Gretta's portfolio consists of $700,000 invested in a stock that has a beta of 1.5 and...

Gretta's portfolio consists of $700,000 invested in a stock that has a beta of 1.5 and $300,000 invested in a stock that has a beta of 0.8. The risk-free rate is 6% and the market risk premium is 5%. Which of the following statements is CORRECT? Answers: a. The portfolio's required return is less than 11%. b. If the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than...

You have a portfolio with $15,000 invested in Stock A with a beta of 2.5, $25,000...

You have a portfolio with $15,000 invested in Stock A with a beta of 2.5, $25,000 invested in stock B with a beta of 0.7, and $10,000 invested in Stock C with a beta of 1.0. If the risk-free rate is 2% and the market risk premium is 6%, what is the required return of the portfolio?

A portfolio consists of the following four stocks. The dollar investment and beta on each of...

A portfolio consists of the following four stocks. The dollar investment and beta on each of the stocks are listed below: Stock Investment Beta A $200,000 0.5 B $800,000 0.8 C $1,500,000 1.5 D $2,500,000 -0.25 If the expected return on the market is 11% and the risk-free rate is 4%, what is the portfolio’s required rate of return?

Suppose you have invested $100,000 in the following four stocks. Security Amount invested Beta Average Return...

Suppose you have invested $100,000 in the following four stocks. Security Amount invested Beta Average Return Stock A 20000 0.75 14 Stock B 25000 1.1 13 Stock C 30000 1.36 16 Stock D 25000 1.88 25 The risk-free rate is 5% and the expected market risk premium is 10%. Assume CAPM holds. Required: i. Write the equation of the security market line (SML). (1 mark) ii. Calculate the expected returns of each of the stock and determine which of the...

Consider the following portfolio of four stocks: Security &nb

Consider the following portfolio of four stocks: Security Weight Beta ABC .167 3.09 DEF .25 0.63 GHI .233 1.54 JKL .35 1.81 The 25 - year government of Canada bond has a yield of 2% The market risk premium is 5% What is the portfolio beta? What is the expected return of each security?

A money manager is holding the following portfolio: Stock Amount Invested Beta &nbs

A money manager is holding the following portfolio: Stock Amount Invested Beta 1 $400,000 1.00 2 600,000 0.85 3 300,000 1.20 4 500,000 0.50 5 200,000 1.70 The risk-free rate is 7 percent and the portfolio’s required rate of return is 13.975 percent. The manager would like to sell all of her holdings of Stock 4 and use half the proceeds to purchase more shares of Stock 5, and the other half of...

Johnny's portfolio consists of $100,000 invested in a stock which has a beta = 0.9, $150,000...

Johnny's portfolio consists of $100,000 invested in a stock which has a beta = 0.9, $150,000 invested in a stock which has a beta = 1.2, and $50,000 invested in a stock which has a beta = 1.5. The risk-free rate is 4 percent. Last year this portfolio had a required rate of return of 13 percent. This year nothing has changed except for the fact that the market risk premium has decreased by 2 percent (This year market risk...

Question