7. Your portfolio has a beta of 1.18. The portfolio consists of 15% U.S. Treasury bills, 30% in stock A,and 55% in stock B. Stock A has a risk-level equivalent to that of the overall market. What is thebeta of stock B?1.101.241.401.60 6. Which of the following should not be included in the analysis of a project?1. sunk costsII. opportunity costsIII. erosion costsIV. incremental costs *I onlyIII and IV onlyIl and IV onlyIL 1, and IV only

Portfolio beta = Weight of Treasury bill * Beta of treasury bill + Weight of stock A * Beta of stock…

7. Your portfolio has a beta of 1.18. The portfolio consists of 15% U.S. Treasury bills, 30% in stock A. and 55% in stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of stock B? : 1.10 1.24 1,40 1.60

7. Your portfolio has a beta of 1.18. The portfolio consists of 15% U.S. Treasury bills, 30% in stock A. and 55% in stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of stock B? : 1.10 1.24 1,40 1.60

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

7. Your portfolio has a beta of 1.18. The portfolio consists of 15% U.S. Treasury bills, 30% in stock A,
and 55% in stock B. Stock A has a risk-level equivalent to that of the overall market. What is the
beta of stock B?
1.10
1.24
1.40
1.60

6. Which of the following should not be included in the analysis of a project?
1. sunk costs
II. opportunity costs
III. erosion costs
IV. incremental costs *
I only
III and IV only
Il and IV only
IL 1, and IV only

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