Paul McLaren holds the following portfolio:Stock Investment BetaABCD$150,000 1.40O-0.286Total $375.000-0.260-0.23450,000 0.80Paul plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change?O-0.190100,000 1.00-0.21175.0001.20

StockInvestmentStock's BetaA$150,0001.40B$50,0000.80C$100,0001.00D$75,0001.20Total $375,000Stock E'…

Paul McLaren holds the following portfolio: Stock Investment Beta A B D $150,000 1.40 -0.286 Total $375.000 -0.260 -0.234 50,000 0.80 O-0.190 100,000 1.00 Paul plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change? -0.211 75.000 1.20

Paul McLaren holds the following portfolio: Stock Investment Beta A B D $150,000 1.40 -0.286 Total $375.000 -0.260 -0.234 50,000 0.80 O-0.190 100,000 1.00 Paul plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change? -0.211 75.000 1.20

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

Paul McLaren holds the following portfolio:
Stock Investment Beta
A
B
C
D
$150,000 1.40
O-0.286
Total $375.000
-0.260
-0.234
50,000 0.80
Paul plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change?
O-0.190
100,000 1.00
-0.211
75.000
1.20

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