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6. A measure of risk of investin g in a stock is the stock's beta value (per share). The I ower the beta value, the
6. A measure of risk of investin g in a stock is the stock's beta value (per share). The I ower the beta value, the less risk is associated with that stock. The beta value of two or more shares of different stocks or the same stock is the sum of beta values of each. Deere and Co. stock sells for $120 a share, has a 3-year average return of $10 a share, and the beta value of the stock is 0.48 per share. Boeing Co. stock sells for $200 per share, has a 3-year average return of $25 a share, and the beta value of the stock is 1.40 per share. Steve is considering investing up to $10,000 in these two stocks with the goal of earning at least $1,000 in annual revenue while minimizing his risk as assessed by the beta value. Determine if Steve is able to reach his goal of earning at least $1,000 in annual revenue assuming that both stocks produce average returns, and, if yes, how many shares of each stock Steve should purchase. Now, choose a correct statement. A. Steve should purchase at least 55 Deere and Co. shares B. Steve should purchase 70 shares total (of both companies) C. Steve should purchase at least 25 Boeing Co. shares D. Steve is not able to reach his investment goal assuming average returns E. None of the above answers is co rrect
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