deaththekid9522 deaththekid9522

04-11-2022
Business

Answered

suppose you invest $7,000 in a stock with a beta of 0.5 and $3,000 in another stock with a beta of 1.4. what's the beta of the resulting portfolio? round to two decimal places.

Answer :

DimahiS DimahiS

12-11-2022

The beta of the resulting portfolio is 0.77, round to two decimal places.

The weighted beta of each stock in the portfolio can be added to determine the portfolio's beta.

Weighted beta of a stock = stock's percentage in the portfolio x stock's beta times.

Total value of the portfolio = $7,000 + $3,000 = $10,000

percentage of stock A in the portfolio = $7,000 / $10,000 = 0.70

percentage of stock B in the portfolio = $3,000 / $10,000 = 0.30

weighted beta of stock A = 0.70 x 0.5 = 0.35

weighted beta of stock B = 0.30 x 1.4 = 0.42

Portfolio beta = 0.35 + 0.42 = 0.77.

For more information on beta portfolio, visit:

https://brainly.com/question/23982393

SPJ4

Answer Link

Other Questions

suppose you are short 50 contracts on a 2-year 50-delta call option on tsla and long 25 contracts on tsla stock. how much will your option position increase in

suppose the demand for the polymer (for the upcoming selling season) is forecasted to be normally distributed with a mean of 300 gallons and a standard deviatio

f the expectation xyz will decrease its dividends by 17% annually, if the company paid dividend of $1.75 last year and required rate of return is 22%, what is t

a stock sells for $40. the next dividend will be $4 per share. if the rate of return earned on reinvested funds is a constant 15% and the company reinvests a co

which of the following types of stock funds invests in stock issued by companies expecting higher than average revenue and earnings growth? a. equity income fun

saved river rock, inc., just paid an annual dividend of $2.80. the company has increased its dividend by 2.5 percent a year for the past 10 years and expects to

Which of the following is a factor that resulted in the establishment of the European Union (EU)? A. The spectacular success of the North American Free Trade Ag

you are designing a cylindrical package. you can spend $4 on packaging, which costs $0.10 per square cm. you would like to determine the maximum volume that you

which element of the right to lead assessment model (rlam) is best defined as the difference you make and occurs when all the elements of the rlam are brought t

a technology firm began producing a gaming device and integrated this new product into its product portfolio. the firm offered this product to a completely new