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Destion 5 An investor is forming a portfolio by investing 550,000 in stock A that has a beta of 0.5, and $25,000 in stock B t
Compute the rate of return for an investor who pays $10 for a stock and sells the stock one year later for 512. The investor

Question Use the following information to answer the question: Stocks Expected State of Probability of Return if this the Ec
Time Preference for Consumption. People want to spend their money sooner Question 4 One year Treasury securities yield . The
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Answer #1

Hi

As per policy we will solve only first question here.

5) Here Portfolio A invested amount = $50,000

beta (A) = 0.5

Portfolio B invested Amount = $25,000

beta (B) = 0.90

beta of portfolio = beta(A)* weighted (A) + beta(B) * weight (B)

' = 0.5*50000/(50000+25000) + 0.9*25000/(50000+25000)

=0.5*2/3 + 0.9*1/3

= 0.63

Thanks

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