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A money manager is holding the following portfolio : Stock Amount Invested Beta 1 $300,000 0.6 2 $300,000 1 3 $500,000 1.4 4 $500,000 1.8
A money manager is holding the following portfolio :
Stock | Amount Invested | Beta | ||
1 | $300,000 | 0.6 | ||
2 | $300,000 | 1 | ||
3 | $500,000 | 1.4 | ||
4 | $500,000 | 1.8 |
The risk free rate is 6 percent and the portfolio%u2019s required rate of return is 12.5 percent. The manager would like to sell all of her holdings of Stock 1 and use the proceeds to purchase more shares of Stock 4. What would be the portfolio%u2019s required rate of return following this change? SHOW ALL WORK!!
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Ecological Money And Finance
Authors: Thomas Lagoarde-Segot
1st Edition
3031142314, 978-3031142314
