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An investor's portfolio has a beta of 0.94 and consists of the following 3 stocks (A,B,C), with their respective beta and % weight shown in
An investor's portfolio has a beta of 0.94 and consists of the following 3 stocks (A,B,C), with their respective beta and % weight shown in the table below:
A | B | C | |
Beta | 0.7 | 0.9 | 1.3 |
Weight | 40% | 30% | 30% |
If the investor wants to swap out Stock A and reinvest the money into another stock that will raise the portfolio's beta to 1.05, the new stock should have a beta of _________.
0.850 | ||
0.975 | ||
1.225 | ||
1.015 |
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