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Jill Angel holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.875. Stock Investment Beta A $50,000 0.50 B $50,000 0.80
Jill Angel holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.875.
Stock | Investment | Beta | ||
A | $50,000 | 0.50 | ||
B | $50,000 | 0.80 | ||
C | $50,000 | 1.00 | ||
D | $50,000 | 1.20 | ||
Total | $200,000 |
If Jill replaces Stock A with another stock, E, which has a beta of 1.60, what will the portfolio's new beta be?
a. 1.10
b. 0.85
c. 1.35
d. 1.30
e. 1.15
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