Question 11 (1 point) Question 11 Unsaved Suppose you held a diversified portfolio consisting of a $1,000 investment in each of 10 different common stocks. The portfolio's beta is 1.60. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 2.40 for $1,000 and use the proceeds to buy another stock with a beta of 1.00. What would your portfolio's new beta be? Question 11 options:

0.2000

1.0000

1.4600

1.7400

Question 12 (1 point)

HR Industries (HRI) has a beta of 2.2, while LR Industries' (LRI) beta is 0.80. The risk-free rate is 3%, and the required rate of return on an average stock is 10%. The expected rate of inflation built into r_RF falls by 1.0 percentage points, the real risk-free rate remains constant, the required return on the market falls to 9.0%, and all betas remain constant. After all of these changes, what will be the difference in the required returns for HRI and LRI, that is, r_HRI - r_LRI.

Question 12 options:

10.78%

10.29%

9.31%

9.80%

8.82%

You have been managing a $900,000 portfolio that has a beta of 1.50 and a required rate of return of 15%. The current risk-free rate is 3.00%. Assume that you receive another $100,000. If you invest the money in a stock with a beta of 3.4, what will be the required return on your million dollar portfolio?

Question 13 options:

16.520%

17.346%

18.172%

15.694%

14.868%

Question 14 (1 point)

A mutual fund manager has a $80 million portfolio with a beta of 2.0. The risk-free rate is 4.5%, and the market risk premium is 5.5%. The manager expects to receive an additional $20 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 14%. What should be the average beta of the new stocks added to the portfolio?

Question 14 options:

	0.5727
	0.6364
	0.7000
	0.6045
	0.6682

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Question 15 (1 point)

Assume that the risk-free rate is 6.80% and the required return on the market is 9.80%. What is the required rate of return on a stock with a beta of 2.640?

Question 15 options:

	-37.024%
	50.624%
	14.720%
	-1.120%
	32.672%