Angel currently holds a $400,000 portfolio consisting of the four stock listed below stocks. The portfolio's...

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Angel currently holds a $400,000 portfolio consisting of the four stock listed below stocks. The portfolios beta is 0.88. St

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Answer 1

Answer #1

Answer is 1.06

Weight of Stock A = Investment in Stock A / Total Investment
Weight of Stock A = $100,000 / $400,000
Weight of Stock A = 0.25

New Portfolio Beta = Old Portfolio Beta - Weight of Stock A * Beta of Stock A + Weight of Stock E * Beta of Stock E
New Portfolio Beta = 0.88 - 0.25 * 0.50 + 0.25 * 1.25
New Portfolio Beta = 1.06

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Answer 2

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