Single parent and motivational training consultant

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Reference no: EM13763918

Michael Margolis is a single parent and motivational training consultant from Reno, Arizona. He is wondering about potential returns on investments given certain amounts of risk. Michael invested a total of $6000 in three stocks ($2000 in each) with different betas: stock A with a beta of 0.8, stock B with a beta of 1.7, and stock C with a beta of 2.5.

(a) If the stock market rises 7 percent over the next year, what will be the likely value of each investment?

(b) If the stock market declines 8 percent over the next year, what will be the likely value of each of Michael’s investments?

Reference no: EM13763918

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