Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you hold a diversified portfolio worth $500,000 with 20 stocks. The beta of the portfolio is 1.4. Now you sold stock A worth $50,000

Suppose you hold a diversified portfolio worth $500,000 with 20 stocks. The beta of the portfolio is 1.4. Now you sold stock A worth $50,000 whose beta is 1.8. You want to buy a stock whose beta is 0.8. How much do you have to buy to make your portfolios beta be 1.2?

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

Step: 3

blur-text-image

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

Financial Liberalization And Bank Performance Empirical Evidence From Pakistan

Authors: Ghulam Shabbir Khan Niazi, Abid Aman

1st Edition

3639218220, 978-3639218220

More Books

Students also viewed these Finance questions

Question

1. What promises does World Vision make concerning personal data?

Answered: 1 week ago

Question

Q.No.1 Explain Large scale map ? Q.No.2 Explain small scale map ?

Answered: 1 week ago