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Terry invested equal amounts in five stocks to form an investment portfolio, which has a beta equal to 1.2. Terry is considering selling the riskiest stock in the portfolio which has a beta of 2.2 and replacing it with another stock which has a beta of 0.8 Assuming equal amounts are invested in each stock in the portfolio, what is the new beta of the investment portfolio?
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- You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.20 and the beta of the portfolio is 1.80, what is the beta of the other?You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.16 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? Answer to two decimals.You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.26 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
- You form a portfolio by investing equally in four securities: stock A, stock B, the risk-free security, and the market portfolio. What is the beta of your portfolio if bA = .8 and bB = 1.2?AKD investment company invested equal amount in 5 stocks to form investment portfolio that has a beta 1.5. AKD is planning to dispose riskiest stock in the portfolio which has beta co-efficient to 2.2 and replace it with another stock. If AKD replaces its beta 2.2 stock with beta 1.2 stock, (of equal amount), what will be the new beta of his investment portfolio?Carl plans to add one of two alternative stocks to his portfolio. Stock A has a correlation of 0.70 with his portfolio and Stock B has a correlation of 0.10. Both stocks have the same standard deviation of returns. Based on this information, relative to Stock A, Stock B will result in: a. less total risk and more active risk for the portfolio b. less total risk and less active risk for the portfolio С. more total risk and less active risk for the portfolio d. more total risk and more active risk for the portfolio
- You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.25 and an expected return of 15%. The other stock has an expected return of 21%. The total portfolio is equally as risky as the market (i.e.Bp=1). What is the beta for the other stock in your portfolio? What is the expected return of the risk-free asset? What is the expected return of the market? What is the expected return of your portfolio?You have chosen a stock for your two-asset portfolio and you need to choose one more stock. Which of the following stocks minimizes the risk of your two-asset portfolio? Stock 1 with a covariance of 3,411 Stock 2 with a correlation coefficient of -0.62 O Stock 3 with a correlation coefficient of -0.17 Stock 4 with a covariance of 1,100 O Stock 5 with a correlation coefficient of 0.66You have a portfolio that is equally invested in Stock F with a beta of 1.15, Stock G with a beta of 1.52, and the risk-free asset. What is the beta of your portfolio? How do I solve this?
- You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5 stocks are as follows: 0.8, -1.3, 0.95, 1.2, and 1.4. The risk-free return is 3% and the market return is 7%. a. Compute the beta of the portfolio. b. Compute the required return of the portfolio.You were offered 2 investment opportunities, Stock M and Stock D. Your decision as to which investment to take will be based on the results of the comparative Expected Rate of Return using the following data: Stock M Return is 9.6% and Beta is 0.95 while Stock D Return is 8.7% and Beta is 1.2. A risk free return in the market, as measured by the return on government stock is 5.6%. *You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.34 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the portfolio beta?
