Portfolio Beta Your retirementfund consists of a $7,000investment in each of 12different common stocks. Theportfolio's beta is 1.50. Supposeyou sell one of the stocks with abeta of 0.9 for $7,000 and usethe proceeds to buy anotherstock whose beta is 2.0.Calculate your portfolio's newbeta. Do not round intermediatecalculations. Round your answerto two decimal places.

New portfolio's beta = 1.59Explanation:Step 1: Calculate the initial portfolio's weighted average…

Answered: Portfolio Beta Your retirement fund…

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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Your retirement fund consists of a $5,000 investment in each of 15 different common stocks. The portfolio's beta is 1.20. Suppose you sell one of the stocks with a beta of 0.7 for $5,000 and use the proceeds to buy another stock whose beta is 1.8. Calculate your portfolio's new beta. Do not round intermediate calculations. Round your answer to two decimal places.
Use the data in the figure 20.1 and calculate thepayoff and the profits for investments in each ofthe following January expiration options, assumingthat the stock price on the expiration date is $125.a. Call option, X=$120b. Put option, X=$120c. Call option, X=$125d. Put option, X=$125e. Call option, X=$130f. Put option, X=$130
A portrollo consists of assets with the following expected returns: Technology stocks Pharmaceutical stocks Utility stocks Savings account a. What is the expected return on the portfolio if the investor spends an equal amount on each asset? Round your answer to two decimal places. % 26% 16 9 4 b. What is the expected return on the portfolio if the investor puts 53 percent of available funds in technology stocks, 15 percent in pharmaceutical stocks, 14 percent in utility stocks, and 18 percent in the savings account? Round your answer to two decimal places. %
Assume you have formed a portfolio of stocks by investing $200 in stock X, $300 in stock Y, and $500 in stock Z. If the Beta for stock X, Y, and Z are -1 , 0.3 , and -1.8 respectively. What will be your portfolio Beta? (Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)
You have a portfolio with a beta of 1.59. What will be the new portfolio beta if you keep 86 percent of your money in the old portfolio and 14 percent in a stock with a beta of 0.58? (Round your answer to 2 decimal places.) New portfolio beta: ___.__%
Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.30. Now suppose you decided to sell one of your stocks that has a beta of 0.80 and to use the proceeds to buy a replacement stock with a beta of 1.60. What would the portfolio's new beta be? Do not round your intermediate calculations. Round your final answer to 2 decimal places. a. 1.70 b. 1.34 c. 2.10 d. 1.60
Your purchase $8,000 of Viking stock and $7,000 of Saint stock. Viking's beta is 0.63 and Saint's beta is 1.28. If the expected return for the overall stock market is 12.0% and the T-Bill yield is 3.1%, what is your portfolio's expected return? Enter your answer as a decimal showing four decimal places. For example, if your answer is 8.25%, enter .0825.
You purchase a mutual fund at an offer price of $15.79 per share. If the net asset value is $15.28, find the sale charge percent. Round to the nearest tenth. % Need Help? Read It Watch It Master It
Suppose you allocate 2/5 of your portfolio value to a stock that has an expected return of 8% and the rest to another stock that has an expected return of 17%. What is the expected return on your two-stock portfolio? Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).
Stocks A and B have expected returns of 0.119 and 0.133, respectively. You form a portfolio consisting of $5,000 in Stock A and $6,000 in Stock B. What is your portfolio's expected return? Enter your answer as a decimal and show 4 decimal places. Type your answer... Previous
You expect an RFR of 9 percent and the market return (RM) of 14 percent. Compute the expected return for the following stocks. Round your answers to two decimal places. UIIUWIny SLULKS. nuunu yuui aliswers LU Lwu ue Stock Beta E(R,) 0.80 % 1.35 D -0.30
You have $19,256 to invest in a stock portfolio. Your choices are Stock X with an expected return of 13.08 percent and Stock Y with an expected return of 10.37 percent. If your goal is to create a portfolio with an expected return of 12.06 percent, how much money (in $) will you invest in Stock X? Answer to two decimals, carry intermediate calcs. to four decimals.

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