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Suppose you have a portfolio that has. $120 in stock A with a beta of 1.06, $480 in stock B with a beta of 0.63, and $360 in the market portfolio. You have another $240 to invest. You wish to achieve a beta for your whole portfolio to be the same as the risk- free asset. What is the beta of the added security? The beta of the added security is Note: Please retain at least 4 decimal places in your calculations and at least 2 decimal places in your final answer.

Suppose you have a portfolio that has. $120 in stock A with a beta of 1.06, $480 in stock B with a beta of 0.63, and $360 in the market portfolio. You have another $240 to invest. You wish to achieve a beta for your whole portfolio to be the same as the risk- free asset. What is the beta of the added security? The beta of the added security is Note: Please retain at least 4 decimal places in your calculations and at least 2 decimal places in your final answer.

Essentials Of Investments
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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Suppose you have a portfolio that has. $120 in stock A with a beta of 1.06, $480 in stock B with a beta of 0.63, and $360 in the market portfolio. You have another $240 to invest. You wish to achieve a beta for your whole portfolio to be the same as the risk- free asset. What is the beta of the added security? The beta of the added security is Note: Please retain at least 4 decimal places in your calculations and at least 2 decimal places in your final answer.
Transcribed Image Text:Suppose you have a portfolio that has. $120 in stock A with a beta of 1.06, $480 in stock B with a beta of 0.63, and $360 in the market portfolio. You have another $240 to invest. You wish to achieve a beta for your whole portfolio to be the same as the risk- free asset. What is the beta of the added security? The beta of the added security is Note: Please retain at least 4 decimal places in your calculations and at least 2 decimal places in your final answer.
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