Question
SIU is a mutual fund that invests in an efficient portfolio that consists of 75% investment in the market portfolio and 25% investment in the
SIU is a mutual fund that invests in an efficient portfolio that consists of 75% investment in the market portfolio and 25% investment in the risk-free asset. T is a stock which has the same standard deviation as SIU, the correlation between T and the market portfolio is 0.45. What is the Beta of the stock T?
You hold three stocks in your portfolio - stock A, stock B, and stock C. The portfolio beta is 1.50. Stock A constitutes 20 percent of the dollar value of your holdings and has a beta of 1.00. If you sell all of your holdings in stock A, and replace them with an equal investment in stock D (which has a beta of 1.25), your new portfolio beta will be?
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