Portfolio Beta Your retirementfund consists of a $7,000investment in each of 12different common stocks. Theportfolio's beta is 1.50. Supposeyou sell one of the stocks with abeta of 0.9 for $7,000 and usethe proceeds to buy anotherstock whose beta is 2.0.Calculate your portfolio's newbeta. Do not round intermediatecalculations. Round your answerto two decimal places.

New portfolio's beta = 1.59Explanation:Step 1: Calculate the initial portfolio's weighted average…

Answered: Portfolio Beta Your retirement fund…

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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You have a portfolio with a beta of 1.59. What will be the new portfolio beta if you keep 86 percent of your money in the old portfolio and 14 percent in a stock with a beta of 0.58? (Round your answer to 2 decimal places.) New portfolio beta: ___.__%
Alejandra invested $2,200 in a mutual fund in 2014. Her account has a balance of $3,100 at the end of 2020. Calculate Alejandra's geometric mean return. Question 8 options: 4.65% 5.37% 5.88% Insufficient information is provided
If a mutual fund's net asset value is $23.30 and the fund sells its shares for $25.00, what is the load fee as a percentage of the net asset value? Round your answer to two decimal places.....%
You own $14,755 of Olympic Steel stock that has a beta of 3.14. You also own $19,295 of Rent-a-Center (beta = 1.61) and $22,700 of Lincoln Educational (beta = 0.62). What is the beta of your portfolio? Note: Round your answer to 2 decimal places. Portfolio beta
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An individual has $15,000 invested in a stock with a beta of 0.3 and another $65,000 invested in a stock with a beta of 1.7. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
You have $18,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 13 percent and Stock Y with an expected return of 11 percent. If your goal is to create a portfolio with an expected return of 12.18 percent, how much money will you invest in Stock X and Stock Y? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Stock X Stock Y
Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buy another stock with a beta of 1.90. What would your portfolio's new beta be? Do not round intermediate calculations. Round your answer to two decimal places.
Portfolio Beta Your investment club has only two stocks in its portfolio. $50,000 is invested in a stock with a beta of 0.7, and $70,000 is invested in a stock with a beta of 2.3. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
Your investment club has only two stocks in its portfolio. $35,000 is invested in a stock with a beta of 0.5, and $55,000 is invested in a stock with a beta of 1.8. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
You are considering investing in a mutual fund. The fund is expected to earn a return of 13 percent in the next year. If its annual return is normally distributed with a standard deviation of 17 percent, what return can you expect the fund to beat 95 percent of the time? (Note: Write your answer as decimals with three decimal places. For example, if you answer is -8.7%, you should write -0.087 in the answer box. DO NOT write -8.7 in the box as you will be marked wrong).

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