ou own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 1.41 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? ( Hint: Remember that the market has a Beta = 1; also remember that equally invested means that each asset has the same weight - since there are 3 assets, each asset's weight is 1/3 or 0.3333. Use 0.333333, and not only 0.33, sorry, calculation is sensitive to it). Enter the answer with 4 decimals (e.g. 1.1234)
ou own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 1.41 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? ( Hint: Remember that the market has a Beta = 1; also remember that equally invested means that each asset has the same weight - since there are 3 assets, each asset's weight is 1/3 or 0.3333. Use 0.333333, and not only 0.33, sorry, calculation is sensitive to it). Enter the answer with 4 decimals (e.g. 1.1234)
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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