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 portfolio's...

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

Stock	Investment	Beta
A	$100,000	0.50
B	$100,000	0.80
C	$100,000	1.00
D	$100,000	1.20

If Angel replaces Stock A with another stock, E, which has a beta of 1.25, what will the portfolio's new beta be? Do not round your intermediate calculations.

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Answer 1

Answer #1

Portfolio Beta : Step 1: Calculate the Weight of stocks Stock Weight E 0.25 Value $1,00,000 $1,00,000 $1,00,000 B Weight Calc

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Answer 2

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