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(Security market line) You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The betas for each
(Security market line) You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The betas for each stock are found below Beta 2.00 0.90 0.60 1.40 Asset a. What is the portfolio beta for your proposed investment portfolio? b. How would a 25 percent increase in the expected return on the market impact the expected return of your portfolio? c. How would a 25 percent decrease in the expected return on the market impact the expected return on each asset? d. If you are interested in decreasing the beta of your portfolio by changing your portfolio allocation in two stocks, which stock would you decrease and which would you increase? Why? a. The portfolio beta for your proposed investment portfolio is(Round to three decimal places.) b. A 25% increase in the expected retum on the market will cause the expected return of your portfolio to c. A 25% decrease in the expected return on the market will have the following impact on the expected return on each asset Asset A would " by L % select from the drop-down menu and round the answer to two decimal places ) by LJ96. (Select from the drop-down menu and round the answer to two decimal places.) Aset B would by(Select from the drop-down by L %. (Select from the drop-down menu and round the answer to two decimal places.)
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