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An investor currently holds the following portfolio: 8,000 shares of Stock A, worth $14,000; Beta = 1.5 15,000 shares of Stock B, worth $49,000; Beta
An investor currently holds the following portfolio:
8,000 shares of Stock A, worth $14,000; Beta = 1.5
15,000 shares of Stock B, worth $49,000; Beta = 1.9
25,000 shares of Stock C, worth $95,000; Beta = 2.4
The investor is worried that the beta of his portfolio is too high, so he wants to sell some stock C and add stock D, which has a beta of 1.1, to his portfolio. If the investor wants his portfolio to have a beta of 1.71, he must replace $______ stock C with stock D.
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