Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Over the past several weeks you have assembled a small stock portfolio via the purchase of small amounts of different company stocks. You know that

image text in transcribed
Over the past several weeks you have assembled a small stock portfolio via the purchase of small amounts of different company stocks. You know that the point of a portfolio is to reduce your overall exposure to systematic risk, but aren't sure exactly what the risk of your new portfolio is. You have purchased the following : $5,000 of Ford Stock, $8,000 of John Deer $ tock, and $10,000 of Health Care of America (HCA) Stock. You have estimated the betas of these stocks to be the following : a of 4.45 for Ford, a of 0.86 for John Deere, and a of 1.7 for HCA. What is the beta of your portfolio? (Round to 2 decimals)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance

Authors: Angelico Groppelli, Ehsan Nikbakht

7th Edition

1438010362, 9781438010366

More Books

Students also viewed these Finance questions

Question

Why do some individuals confess to a crime they did not commit?

Answered: 1 week ago