In: Finance

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.

Total Portfolio value = Value of 19 stocks + Value of Stock sold |

=142500+7500 |

=150000 |

Weight of 19 stocks = Value of 19 stocks/Total Portfolio Value |

= 142500/150000 |

=0.95 |

Weight of Stock sold = Value of Stock sold/Total Portfolio Value |

= 7500/150000 |

=0.05 |

Beta of Portfolio = Weight of 19 stocks*Beta of 19 stocks+Weight of Stock sold*Beta of Stock sold |

1.31 = Beta of 19 stocks*0.95+1*0.05 |

Beta of 19 stocks = 1.3263 |

Total Portfolio value = Value of 19 stocks + Value of Stock bought |

=142500+7500 |

=150000 |

Weight of 19 stocks = Value of 19 stocks/Total Portfolio Value |

= 142500/150000 |

=0.95 |

Weight of Stock bought = Value of Stock bought/Total Portfolio Value |

= 7500/150000 |

=0.05 |

Beta of Portfolio = Weight of 19 stocks*Beta of 19 stocks+Weight of Stock bought*Beta of Stock bought |

Beta of Portfolio = 1.3263*0.95+1.35*0.05 |

Beta of Portfolio = 1.33 |

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 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.

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 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

You have a $2 million portfolio consisting of a $100,000
investment in each of 20 different stocks. The portfolio has a beta
of 1.05. You are considering selling $100,000 worth of one stock
with a beta of 1.15 and using the proceeds to purchase another
stock with a beta of 1.3. What will the portfolio's new beta be
after these transactions? Do not round intermediate calculations.
Round your answer to two decimal places.

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 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...

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...

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...

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

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