Average beta of the new stocks added to the portfolio

Assignment Help Financial Management

Reference no: EM131572078

A mutual fund manager has a $20 million portfolio with a beta of 1.70. The risk-free rate is 7.25%, and the market risk premium is 4.5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 14%. What should be the average beta of the new stocks added to the portfolio? Do not round intermediate calculations. Round your answer to two decimal places. Enter a negative answer with a minus sign.

Reference no: EM131572078

Questions Cloud

Conduct sensitivity analysis : Conduct a sensitivity analysis—creating a table and/or graph that shows the sensitivity of NPV to procedures per day,

Inextinguishable race works and owns its economy : The "Third Bank of the River" is neither here nor there, a social space between one's home and the unknown, and a psychological place between responsibility

Write one-month call option with strike price : The risk-free interest rate is 8%. You write a one-month call option with a strike price of 29$.

How many years will it take for the population to reach 1.5 : If the current population in china is 1.33 billion how many years will it take for the population to reach 1.5 billion if it is growing at .49% a year

Average beta of the new stocks added to the portfolio : What should be the average beta of the new stocks added to the portfolio?

How long will it be before you have enough to buy the car : How long will it be before you have enough to buy the car?

Mother tells son not to sit on the crystal stair : Walt likes "nights perfectly quiet...solitude...Nature" without reservation. Mother tells Son not to sit on the crystal stair.

Write a short paragraph explaining the data : Write a short paragraph explaining the data. Write the corresponding RQ and Ho/Ha related to satisfaction - Explain how accurate the prediction

Find the probability that a zero was transmitted : A space probe near Neptune communicates with Earth using bit strings. Suppose that in its transmissions it sends a 1 one-third of the time and a 0 two-thirds.

User Account

All Pages