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An investor holds a fund that consists of six stocks. His investment in each stock as well as each stock's beta is listed in the
An investor holds a fund that consists of six stocks. His investment in each stock as well as each stock's beta is listed in the tables below: COMMON STOCK (TICKER SYMBOL) Nanyang Business Systems (NBS) Yunnan Garden Supply, Inc. (YUWHO) Bird Nest Soups Company (SLURP Wacho.com (WACHO) Park City Cola Company (BURP) Oldies Records Ltd. (SHABOOM) BETA 1.40 0.80 0.60 1.80 1.05 0.90 Investment Common stock (Ticker Symbol) NBS $800 YUWHO SLURP WACHO BURP SHABOOM S3000 $2500 S2500 $1500 S1000 The risk-free rate is 5.5% and the market required return is 13%. a) What is the required rate of return of each stock? b) What is portfolio's beta? c) What is portfolio's required rate of return? d) Suppose you sell YUWHO stock and use the entire amount (i.e. $3000) in buying additional stock of NBS. What will be the portfolio's beta now
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