Question
Sharon Smiths portfolio contains three different financial assets. Common stock of Cornwallis Hotel Company represents 23% of the value of the portfolio; Pizza Company represents
Sharon Smith’s portfolio contains three different financial assets. Common stock of Cornwallis Hotel Company represents 23% of the value of the portfolio; Pizza Company represents 42%; and Seaman’s Beverages represents the remaining 35%. The beta of Cornwallis Hotel is 1.2. Pizza Company has a beta of 1.9 and the beta of Seaman’s Beverages is -.6.
Calculate the beta for Sharon’s portfolio. Explain why it may be beneficial to an investor to own a variety of investments rather than using your money to invest in only one financial asset.
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Chemistry The Central Science
Authors: Theodore Brown, Eugene LeMay, Bruce Bursten, Catherine Murphy, Patrick Woodward
12th edition
321696727, 978-0132175081, 978-0321696724
