Solved: Find beta of replacement stock to have a new portfolio beta, Finance Basics

Find beta of replacement stock to have a new portfolio beta

You are managing a portfolio of 10 stocks which are held in equal amounts. The current beta of the portfolio is 1.64, and the beta of Stock A is 2.0. If Stock A is sold, what does the beta of the replacement stock have to be to have a new portfolio beta of 1.55?

Solution Preview :

Prepared by a verified Expert

Finance Basics: Find beta of replacement stock to have a new portfolio beta

Reference No:- TGS0552544

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Finance Basics

Q : What is the real risk-free rate of return

The current interest rate premiums for relatively safe corporate firms is as follows: inflation premium = 2.1%; default risk premium = 1.4%. Based on this data, what is the real risk-free rate of return?

Q : What does market expect will be yield on treasury securities

Assume that the expectations theory holds. What does the market expect will be the yield on 1-year Treasury securities two years from now?

Q : Necessary it and service investments

For that meeting, you would like to give an executive presentation and hence have asked your Project Management Office to make the case for the necessary IT and service investments to launch Online Education in Africa. The presentation should be i

Q : Calculate required rate of return for management

Calculate required rate of return for Management, Inc., assuming that investors expect a 5% rate of inflation in the future. The real rate is equal to 3% and the market risk premium is 5%.

Q : Find beta of replacement stock to have a new portfolio beta

The current beta of the portfolio is 1.64, and the beta of Stock A is 2.0. If Stock A is sold, what does the beta of the replacement stock have to be to have a new portfolio beta of 1.55?

Q : Short narrative writing

Polish and extend a short narrative writing (2 - 3 pgs) Feel free to extrapolate.

Q : What are the thirty equal annual payments

If you buy a factory for $250,000 and the terms are 20% down, the balance to be paid off over 30 years at a 12% rate of interest on the unpaid balance, what are the 30 equal annual payments?

Q : How did the european union come into being and develop

Write an essay about 750 words to answer the following question: Why and how did the European Union come into being and develop so greatly?

Q : Tendency of ratios to fluctuate over time

Discuss the tendency of ratios to fluctuate over time, explain how accounting practices, seasonality, economy, competitors as well as other factors can influence them, and how.

1957564

Questions
Asked

3,689

Active Tutors

1445020

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Solution Preview :

Prepared by a verified Expert

Finance Basics: Find beta of replacement stock to have a new portfolio beta

Reference No:- TGS0552544

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : What is the real risk-free rate of return

Q : What does market expect will be yield on treasury securities

Q : Necessary it and service investments

Q : Calculate required rate of return for management

Q : Find beta of replacement stock to have a new portfolio beta

Q : Short narrative writing

Q : What are the thirty equal annual payments

Q : How did the european union come into being and develop

Q : Tendency of ratios to fluctuate over time

Client who is being treated in the outpatient clinic

Describe the six specific health issues

Woman with a significant history of gerd

What physiological changes occur are responsible

Environmental risk that is affecting a minority community

Understanding the healthcare environment

How can a nurse clinical decision-making skills assist

Solution Preview :

Prepared by a verified Expert

Finance Basics: Find beta of replacement stock to have a new portfolio beta

Reference No:- TGS0552544

Recent Questions Asked Finance Basics

Q : What is the real risk-free rate of return

Q : What does market expect will be yield on treasury securities

Q : Necessary it and service investments

Q : Calculate required rate of return for management

Q : Find beta of replacement stock to have a new portfolio beta

Q : Short narrative writing

Q : What are the thirty equal annual payments

Q : How did the european union come into being and develop

Q : Tendency of ratios to fluctuate over time

Asked Questions