What should be the beta of a replacement stock if an investor wishes to achieve a portfolio beta of 1.2 by replacing stock C in the following equally weighted portfolio: stock A = 0.9 beta; stock B = 1.1 beta; stock C = 1.35 beta?
A) 0.7
B) 1.6
C) 1.2
D) 1.8
Correct Answer:
Verified
Q42: What is the beta of a U.S.Treasury
Q53: Estimate a stock's beta based on the
Q53: A considerable scattering in the plot of
Q57: What is the most logical explanation for
Q57: If a stock's beta is 0.8 during
Q59: If the slope of the line measuring
Q60: If the line measuring a stock's historic
Q61: What will happen to a stock that
Q63: Investing borrowed funds in a stock portfolio
Q63: Calculate the risk premium on stock C
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents