Currently, you own a portfolio comprised of the following three securities. How much of the riskiest security should you sell and replace with risk-free securities if you want your portfolio beta to equal 90 percent of the market beta? Stock Value D $13,640 E 15,980 F 23,260 Beta 1.13 1.48 .86

Currently, you own a portfolio comprised of the following three securities. How much of the riskiest security should you sell and replace with risk-free securities if you want your portfolio beta to equal 90 percent of the market beta? Stock Value D $13,640 E 15,980 F 23,260 Beta 1.13 1.48 .86

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Currently, you own a portfolio comprised of the following three securities. How much of the riskiest security should
you sell and replace with risk-free securities if you want your portfolio beta to equal 90 percent of the market beta?
Stock Value
$13,640
15,980
23,260
E
F
Multiple Choice
O $7,023.15
$7,811.29
O $8,666.67
O $7,753.51
Beta
1.13
1.48
.86
$8,318.50

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