please show work What should be the Beta of a replacement stock if an investor wishes...

please show work

What should be the Beta of a replacement stock if an investor wishes to achieve a portfolio Beta of 1.0 by replacing Stock B in the following equally weighted portfolio: Stock A = .9 Beta; Stock B = 1.1 Beta; Stock C = 1.35 Beta?

		1.18 Beta
		1.26 Beta
		1.00 Beta
		0.75 Beta

Expert Solution

Ans is 0.75 Beta

Calculations-

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jeff jeffy answered 3 years ago

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