Question
In: Finance
Suppose you hold a portfolio consisting of a $10,000 investment in each of 10 different common stocks.
Suppose you hold a portfolio consisting of a $10,000 investment in each of 10 different common stocks. The portfolio’s beta is 1.25. Now suppose you decided to make two changes to your portfolio as follows:
a) sell stock X that has a beta of 1.0 and replace it with stock Y that has a beta od 1.5, and
b) sell stock W that has a beta of 1.2 and replace it with stock Z that has a beta of 2.1. What would the portfolio’s new beta be after you make the two changes?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Suppose you hold a portfolio consisting of a $10,000 investment in each of 10 different common stocks.
Suppose you hold a portfolio consisting of a $10,000 investment
in each of 10 different common stocks. The portfolio’s beta is
1.25. Now suppose you decided to make two changes to your portfolio
as follows: a) sell stock X that has a beta of 1.0 and replace it
with stock Y that has a beta od 1.5, andb) sell stock W that has a beta of 1.2 and replace it with stock
Z that has a beta of 2.1. What would...
You hold a diversified portfolio consisting of a $10,000 investment in each of 20 different common...
You hold a diversified portfolio consisting of a $10,000
investment in each of 20 different common stocks (i.e., your total
investment is $200,000). The portfolio beta is equal to 1.2 . You
have decided to add another stock with a beta equal to 1.7 for
$50,000. What will be the beta of the new portfolio? (Round to two
digit decimal places)
You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. The...
You hold a portfolio consisting of a $5,000 investment in each
of 20 different stocks. The portfolio beta is equal to 1.12. You
have decided to sell a coal mining stock (b = 1.00) at $5,000 net
and use the proceeds to buy a like amount of a mineral rights
company stock (b = 2.75). What is the new beta of the portfolio?
Select the correct answer.
a. 1.2075
b. 1.1895
c. 1.1955
d. 1.1835
e. 1.2015
Supposed San Jose portfolio consisting of a $10,000 investment in each of H different common stocks...
Supposed San Jose portfolio consisting of a $10,000 investment in
each of H different common stocks the portfolios beta is 1.25 now
supposed Stan decided to sell one of the Stocks that has a beta of
1.0 0 NT use the proceeds to buy a replacement stock with a beta of
0.66 what was the portfolios new beta be
Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common...
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 0.76. What would the portfolio's
new beta be? Select the correct answer.
a. 1.06
b. 1.10
c. 1.22
d. 1.18
e. 1.14
Suppose you hold a diversified portfolio consisting of a $10,000 invested equally in each of 10...
Suppose you hold a diversified portfolio consisting of a $10,000
invested equally in each of 10 different common stocks. The
portfolio’s beta is 1.120. Now suppose you decided to sell two
stocks with betas of 0.950 and 1.100, respectively and buy one
stock with a beta of 1.750. 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...
Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 1.84. 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 0.93. 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...
Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 0.75. 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 1.60. 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...
Suppose you held a diversified portfolio consisting of a $7,500
investment in each of 20 different common stocks. The portfolio's
beta is 1.31. 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 1.35. 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 $6,406 invested equally in each of 5...
Suppose you hold a diversified portfolio consisting of a $6,406
invested equally
in each of 5 different common stocks. The portfolio’s
beta is 1.18. 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?
1.12
1.02
0.92
1.22
1.32
Your portfolio consists of $80,406 invested in a stock that has
a beta = 1.2,
$97,421...
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