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What impact would that purchase have on the risk structure

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Question - a. Explain the 2 ways an investor can obtain a return in the equity market.

b. Calculate the portfolio beta if an investor holds the following shares:

Westpac Bank

$15,000

Beta 1.35

Domino's Pizza

$9,000

Beta 1.5

Vodafone

$12,500

Beta 0.95

c. If the investor added to the portfolio with a purchase of $10,000 worth of shares in Coles with a beta of 1.8, what impact would that purchase have on the risk structure of the portfolio? (Hint: Calculate the new portfolio beta and explain your answer.)

Reference no: EM133124181

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