Problem:
You own a $100,000 portfolio that is invested in Stock A and B. The portfolio beta is equal to the market beta. Stock A has a beta of 1.42. Stock B has a beta of 0.88.
Required:
Question: What is the value of your investment in Stock A?
- $42,333
- $67,444
- $77,778
- $22,222
- $11.334
Note: Show all workings.