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-

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

jeff jeffy answered 2 years ago

based on the CAPM what should be the beta of beta of a stock that has...

based on the CAPM what should be the beta of beta of a stock that has an expected return of 12%, if the risk free is 3.5% and expected return of market portfolio is 12%?

Please show all work. A national car rental agency wishes to analyze the relationship between the...

Please show all work. A national car rental agency wishes to analyze the relationship between the mileage on used vehicles and the selling price. They selected a random sample of 12 comparably equipped 3-year-old Chevrolet Cruzes sold at auctions. The data on mileage and selling price are found below: PRICE MILEAGE 7000 60000 8500 52000 7000 62000 8900 48000 7600 55000 7200 60000 8500 50000 7800 53000 7200 58000 9000 48000 7200 60000 7700 55000 a) Find the regression equation...

An investor is forming a portfolio by investing $50,000 in stock A that has a beta...

An investor is forming a portfolio by investing $50,000 in stock A that has a beta of 0.5, and $25,000 in stock B that has a beta of 0.90. What is the beta of the combined portfolio?

An investor is forming a portfolio by investing $50,000 in stock A which has a beta...

An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 1.50, and $25,000 in stock B which has a beta of 0.90. The return on the market is equal to 6% and treasure bonds have a yield of 4% (rRF). What’s the portfolio beta? 0.60 1.30 1.40 1.80 Using the information from above, what’s the required rate of return on the investor’s portfolio? 5.2% 5.8% 6.6% 7.4%

An investor is forming a portfolio by investing $150,000 in stock A which has a beta...

An investor is forming a portfolio by investing $150,000 in stock A which has a beta of 2.40, and $150,000 in stock B which has a beta of 0.60. The market risk premium is equal to 5% and treasure bonds have a yield of 3% (rRF). What’s the portfolio beta? 1.60 1.95 1.50 1.80 Using the information in Question, calculate the required rate of return on the investor’s portfolio 8.5% 10.5% 12.75% 9.5%

T-TEST (show work) ( no hand written work it is hard to read) A researcher wishes...

T-TEST (show work) ( no hand written work it is hard to read) A researcher wishes to determine if the college students with a “B” average have attain more flying hours by the end of their first semester of college than those that do not have a “B” average at the end of the first semester. The researcher surveys 20 college students that are also student pilots and records their flight hours as well as their GPA (noted as “below...

9) If an investor plans to add a stock to a well-diversified portfolio, the investor should...

9) If an investor plans to add a stock to a well-diversified portfolio, the investor should first consider the ________ risks of that additional stock. A) expected total B) historical total C) systematic D) idiosyncratic E) firm-specific

Please show all work and explain. 3. A share of stock sells today for $52.50. The...

Please show all work and explain. 3. A share of stock sells today for $52.50. The beta of the stock is 1.18. The expected return on the overall market is 10.6% and the risk free rate is 2.5%, What is the overall expected return of the stock? If there is to be a dividend of $1.68 at the end of the year, what should be the price of the stock at the end of the year? If the price of...

Please show work and explain A portfolio consists of $10,000 invested in an international stock fund...

*Please show work and explain* A portfolio consists of $10,000 invested in an international stock fund and $30,000 invested in a domestic stock fund. The standard deviation of the international fund is 35 percent and the standard deviation of the stock fund is 20 percent. If the standard deviation of the portfolio of the two funds is 17.37 percent, what is the correlation coefficient of the international and the domestic fund?

PLEASE SHOW WORK Stock B has an expected return of 10% and a standard deviation of...

PLEASE SHOW WORK Stock B has an expected return of 10% and a standard deviation of 5%. What is the probability of earning a return between 10% and 15%? About 34%

Question