You have a portfolio with a beta of 1.74. What will be the new portfolio beta if you keep 89 percent of your money in the old portfolio and 11 percent in a stock with a beta of 0.74? Note: Do not round intermediate calculation and round your answer to 2 decimal places. New portfolio beta

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A: Portfolio Beta is the weighted average beta of individual stock  Weight of stock 1 = 15000 /…

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A: A portfolio speaks to a collection of monetary resources, such as stocks, bonds, and cash…

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A: According to bartleby guidelines , if question involves multiple sub parts , then 1st sub 3 parts…

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A: A portfolio refers to the collection of financial investments like stocks, bonds, commodities, cash,…

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A: The Capital Asset Pricing Model (CAPM) is a financial model that describes the relationship between…

Q: An individual has $45,000 invested in a stock with a beta of 0.5 and another $30,000 invested in a…

A: Portfolio beta = (beta of the 1st stock * its weight in the portfolio) + (beta of the 2nd stock *…

Q: Assume that the risk-free rate is 6.5% and the market risk premium is 5%. What is the required…

A: Solution:-Capital Asset Pricing Model (CAPM) is a model which gives a formula to calculate the…

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Q: You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a…

A: The beta for the other stock is 1.59. Solution is provided in the explanation section. Hope this…

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A: Expected return on a stock implies the returns expected on a stock after taking into consideration…

Q: Stocks A and B have the following probability distributions of expected future returns: Probability…

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A: The portfolio beta can be computed as sum of betas of stock divided by the number of stocks.

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A: Companies invest their money in different portfolios. Before investing money in any portfolio…

Q: ou have a portfolio with a beta of 1.38. What will be the new portfolio beta if you keep 89 percent…

A: Portfolio Beta: It is calculated by multiplying the stock beta with the proportion of funds in that…

Q: Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different…

A: Given data:> Exsting beta = 0.65> selling stock beta = 1> purchasing stock beta = 1.60

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Q: Stock J has a beta of 1.37 and an expected return of 14.01%. Stock K has a beta of .92 and an…

A: Beta of portfolio.Bp = (Bj * Wj)+(Bk*Wk)whereBp = beta of portfolioBj = beta of stock JBk = beta of…

Q: You have a portfolio with a beta of 1.29. What will be the new portfolio beta if you keep 94 percent…

A: Beta: It is a numerical value which evaluates the variations of a stock to shifts in the stock…

Q: Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different…

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Q: You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a…

A: Beta of portfolio comprising of risk free asset and two stocks is computed as follows:-Bp = (wr*Br)…

Q: A stock has a required return of 11%, the risk-free rate is 3.5%, and the market risk premium is 5%.…

A: The objective of the question is to calculate the beta of the stock and to understand the impact of…

Q: You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a…

A: Since equally invested in risk free asset and 2 stocks Weight of each stock=(1/3)

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A: The required return of the stock is calculated using the Capital asset pricing model(CAPM ).    The…

Q: You have a portfolio with a beta of 1.30. What will be the new portfolio beta if you keep 84 percent…

A: Portfolio Beta is calculated by doing weighted average of the Beta of the individual investment…

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Q: Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different…

A: A group of financial assets such as stocks, bonds, commodities, cash, and cash equivalents, as well…

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A: Beta coefficient shows the systematic risk of the assets. The beta factor shows the systematic risk…

Q: You own a portfolio that is 1 percent invested in Stock W, 23 percent invested in Stock X,22 percent…

A: Expected rate of return of portfolio refers to a term that is being used in order to determine the…

Q: A stock has an expected return of 15.2 percent, the risk-free rate is 3.4 percent, and the market…

A: As per CAPM model, expected return = risk free rate + beta*market risk premium

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A: Beta: It is a numerical value which evaluates the variations of a stock to shifts in the stock…

Q: f you plot the relationship between portfolio expected return and portfolio b he slope of the line…

A: CAPM gives the risk adjusted return of the stock and is represented by the equation of the SML line…

Q: A stock has a required return of 16%, the risk-free rate is 5.5%, and the market risk premium is 4%.…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: A stock has an expected return of 11.4%, the risk-free rate is 5.5%, and the market risk premium is…

A: In the given question we are require to calculate the Beta: We can calculate the Beta using Capital…

Q: You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a…

A: Formula Portfolio beta = (Weight of stock 1*Beta of stock 1)+(Weight of stock 2*Beta of stock 2)…

Q: You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a…

A: The beta of a security is a measurement of the security's volatility of returns relative to the…

Q: Your portfolio is comprised of 30 percent of Stock X, 20 percent of Stock Y, and 50 percent of Stock…

A: In the given case, we have given the proportion or the weight of each stock from the portfolio .…