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Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different...

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Finance

Suppose you held a diversified portfolio consisting of a $7,500investment in each of 20 different common stocks. The portfolio'sbeta is 1.31. Now suppose you decided to sell one of the stocks inyour portfolio with a beta of 1.0 for $7,500 and use the proceedsto buy another stock with a beta of 1.35. What would yourportfolio's new beta be? Do not round intermediate calculations.Round your answer to two decimal places.

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4.1 Ratings (449 Votes)
Total Portfolio value Value of 19 stocks Value of Stock sold 1425007500 150000 Weight of 19 stocks Value of 19 stocksTotal Portfolio Value 142500150000    See Answer
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Suppose you held a diversified portfolio consisting of a $7,500investment in each of 20 different common stocks. The portfolio'sbeta is 1.31. Now suppose you decided to sell one of the stocks inyour portfolio with a beta of 1.0 for $7,500 and use the proceedsto buy another stock with a beta of 1.35. What would yourportfolio's new beta be? Do not round intermediate calculations.Round your answer to two decimal places.

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