Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you have a $2 million portfolio consisting of a $1

You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different...

50.1K

Verified Solution

Question

Finance

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

Answer & Explanation Solved by verified expert
3.7 Ratings (565 Votes)
Answer As given in question a Total amount of Portfolio 2000000 b No of stocks 20 c Amount invested in each stock 100000 d Beta of portfolio 105 e Beta of selling    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

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

Other questions asked by students

Biology
1.2K views

Which of the following is a FALSE statement about fungi?A) they can carry out photosynthesisB)...

Basic Math
1.2K views

If any 3 in a vector space V is a linear combination of vectors a...

Statistics
1.2K views

An elevator has a safety limit that should not exceed 10 people or 1950 lbs...

Statistics
1.2K views

stion 2 stion 3 The mean is sleepwalker s Round to one decimal place as...

Calculus
1.2K views

zilldiffeqmodap11 7 4 009 EP consider the following initial value problem y y tsin t...

Algebra
1.2K views

4 Write an equation for the quadratic relatio 3 a The graph of y x...

Algebra
1.2K views

Which could be the function graphed below f x x 2 Of x x 3...

Accounting
1.2K views

San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions...

Accounting
1.2K views

Assessment Description The purpose of this assignment is to calculate asset ratios, then analyze and...

Accounting
1.2K views

24 South Division has the following information: Sales $800,000 Variable expenses 450,000 Fixed expenses 380,000...

Accounting
1.2K views

please complete! thank you! For journal entries 1 through 12...

Finance
1.2K views

In the case of the Boeing 737 Max crisis, please provide alternatives that may have...