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?

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?

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...

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