Question
*** PLEASE, HURRY UP BUT NEED CORRECT ANSWER *** Q1) JAllen has a 2-stock portfolio with a total value of $100,000. $37,500 is invested in
*** PLEASE, HURRY UP BUT NEED CORRECT ANSWER ***
Q1) JAllen has a 2-stock portfolio with a total value of $100,000. $37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolios beta?
Q2) Dave 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 Dave replaces Stock A with another stock, E, which has a beta of 1.50, what will the portfolio's new beta be?
Q3) You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each. The portfolio's beta is 1.12. You plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.80. What will the portfolio's new beta be?
Q4) Consider the following information and then calculate the required rate of return for the Capital Ozne Company, which holds 4 stocks. The markets required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows:
Stock Investment Beta
A $200,000 1.50
B $300,000 -0.50
C $500,000 1.25
D $1,000,000 0.75
Q5) You hold four stocks in your portfolio: stock A, stock B, stock C, and stock D. The portfolio beta is 1.20. Stock C constitutes 40 percent of the dollar value of your holdings and has a beta of 1.60. If you sell all of your holdings in stock C, and replace them with an equal investment in stock E (which has a beta of 1.25), what will your new portfolio beta will be? Show your work.
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