What is the portfolio new beta

Assignment Help Business Economics
Reference no: EM131857861

Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common stocks, equally. The portfolio's beta is 1.25. Now suppose Stan decided to sell one of his stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35.

What is the portfolio's new beta?

PLEASE SHOW DETAILED STEPS AND FORMULAS TO GET THE ANSWER.

Reference no: EM131857861

Questions Cloud

Discuss work of robert wood johnson foundation committee : Discuss the work of the Robert Wood Johnson Foundation Committee Initiative on the Future of Nursing and the Institute of Medicine research.
What is jameson current stock price : The company's beta is 1.15, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is Jameson's current stock price, P0?
Write a summary of the case- davis vs alabama state bar : Write a summary of the case and complete the given points below. This template needs to be completed using the case listed below.
How does open market policy work : How does Open Market Policy Work? How can the buying and selling of Bonds by the Fed increase or decrease the money supply
What is the portfolio new beta : What is the portfolio's new beta?
What is the effective annual interest rate : What is the effective annual interest rate in each situation?
Capm constant-growth model us bancorp required return : Compute the required return for each company using both CAPM and the constant-growth model.
Discuss the positives of the theories and techniques : In the Jungian, Adlerian and Gestalt theories discuss with your peers what you find to be the positives of the theories and techniques and any criticisms.
How the attending physician determines the care of a patient : Discuss how the attending physician determines the care of a patient. Describe some special computer safeguards that protect the patient's privacy.

Reviews

Write a Review

Business Economics Questions & Answers

  New equation for the demand for tv stands

Suppose that income falls to $800. What is the new equation for the demand for TV stands as a function of price P?

  About partnership agreements

Whenever a partnership agreement is silent on this allocation of profits and losses, profit and losses are divided in the same proportion as capital contributions. Whenever a partnership agreement allocated losses in unequal proportions, but is silen..

  Who benefits from trade barriers

Suppose the United States were to suddenly halt all trade with other countries. How would such an act affect your life and the lives of other Americans? How would such an act affect the Real GDP in the United States? Who benefits from trade barriers?

  Determine whether this is good investment

A new municipal refuse collection truck can be purchased for $84,000. its expected useful life it six years. and by that time its market value will be zero Annual receipts less expenses will be approximately $18,000 per year over the six-year study p..

  Find the price elasticities at two profit maximizing points

A monopolist faces two separate demand curves in two separate markets: P1 = 72 - 3Ql and P2 = 90 - 2Q2. The total cost curve is TC = 6 + 6Q. Find the price elasticities at the two profit maximizing points.

  What are economic and fiscal costs of corruption in country

What are economic and fiscal costs of corruption in a country?

  Calculate the next year anticipated price on the bond

Assume that a 1- year discount bond (bond A) with a face value of $1,000 is currently trading at PV = $938.97, and another 2-year discount bond (bond B) with identical risk features and face value is currently trading at $834.01. Please calculate the..

  The stability of fiscal policy

The stability of fiscal policy. (Blinder and Solow, 1973.) By definition, the budget deficit equals the rate of change of the amount of debt outstanding: δ(t)=?(t). Define d(t) to be the ratio of debt to output: d(t)=D(t)Y(t). Assume that Y(t) grows ..

  Calculate the deadweight loss of monopoly in the market

Five networks are vying to receive the pay-per-view broadcast rights to the World Series of Yahtzee. Each estimates that the inverse demand for watching this nail-biter of an event is given by P = 100 ? 0.01Q. Each can provide the broadcast at a cons..

  Profit-maximizing monopolist will produce

A profit-maximizing monopolist will produce at a point on the _____ portion of the demand curve where _____.

  What would be the real wage of the workers in two countries

Suppose in the United States, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. In the United Kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day. The United States has 30 workers and..

  Is foreign aid worsening our budget deficit

Is America obligated to help poor countries? Is foreign aid worsening our budget deficit?

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