Diversified portfolio consisting

Assignment Help Financial Management
Reference no: EM131826560

Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 1.82. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buy another stock with a beta of 1.69. What would your portfolio's new beta be? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM131826560

Questions Cloud

Consumer purchasing refrigerator is offered two payment plan : A consumer purchasing a refrigerator is offered two payment plans:
What is evolutionary theory and what does it explain : What is evolutionary theory? What does it explain? What are the key mechanisms it involves? How is it different from theories of biological diversity?
What is a realistic amount Ron should expect to spend : Computer Your friend Ron has asked for your help in buying a home computer. He intends to use the computer for word processing, email, entertainment.
Testing for fibromyalgia : A patient named Diana was diagnosed with Fibromyalgia, a long-term syndrome of body pain, and was prescribed anti-depressants.
Diversified portfolio consisting : Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks.
Argue why a different perspective is true instead : Argue why a different perspective is true instead. Imagine you are writing for the same publication/audience as the original piece.
Testing for food safety : A food safety inspector is called upon to investigate a restaurant with a few customer reports of poor sanitation practices.
Configure static routing on the isp router : ITNE2003 - Basic RIP Configuration - Examine the network requirements and What is the gateway of last resort in the routing table of the BRANCH router?
Contrasting the standards or recommendations : Critically analyze current European and United States industry standards or recommendations for any Information Technology (IT) area or subarea.

Reviews

Write a Review

Financial Management Questions & Answers

  Long-term capital management

In 1998, Long-Term Capital Management (LTCM), a prestigious hedge fund, made highly leveraged bets on the spread between U.S. Treasuries and corporate bonds.

  Use swap to convert the debt to a fixed rate

Indicate how the company can use a swap to convert the debt to a fixed rate.

  What is market value of this bond if the yield to maturity

Junkman's Warehouse and Storage Company has an unusual bond outstanding with three years remaining until maturity. The bond is unusual because the annual coupon payments remaining are $100, $200, and $300 and the face value of the bond is $1,200. Wha..

  What is the yield to call for this bond

What is the yield to call (YTC) for this bond if the current price is 110 percent of par value?

  Interest rates and exchange rates

Suppose you find the following rates: Interest rates: U.S.: 3 percent and EU: 4 percent. Exchange rates: Spot; $1.0650; One year forward: $1.0525. What will be the outcome of $100 invested in the U.S. market? What will be the outcome of investing $10..

  Standard deviation of pay off cash flows

You have an opportunity to invest $100 in a venture that will pay off in one year. The expected payoff is $500 and the standard deviation of pay off cash flows is $200. The risk-free rate is 4% per year, the required return on the market is 10%, and ..

  European put option on the stock with strike price

An investor creates a protective put position by buying one share of a stock at $50 and buying a European put option on the stock with strike price $45 at $1.25. What is his profit if he holds his position until maturity of the option and the stock p..

  Calculate the WACC of WTC

The total book value of WTC’s equity is $40 million and book value per share outstanding is $10. calculate the WACC of WTC.

  Investing in some residential income-producing property

Elena Martinez is thinking about investing in some residential income-producing property that she can purchase for $200,000. Elena can either pay cash for the full amount of the property or put up $50,000 of her own money and borrow the remaining $15..

  What is the annual total costs of post card inventory

The ordering cost is $397 per order. What is the annual total costs of post card inventory?

  Market leader in producing self driving agricultural machine

Company ABC is a large publicly traded firm, a market leader in producing self driving agricultural machines.

  Calculate brauer debt-to-assets ratio

Calculate Brauer's debt-to-assets ratio assuming the firm uses only debt and common equity.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd