What must the beta be for the other stock in your portfolio

Assignment Help Financial Management

Reference no: EM131613283

You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 1.58 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Hint: Remember that the market has a Beta=1; also remember that equally invested means that each asset has the same weight- since there are 3 assets, each asset's weight is 1/3 or 0.3333). Enter the answer with 4 decimals (e.g. 1.1234)

Reference no: EM131613283

Questions Cloud

Differences between an all-cash and all-stock transaction : What are the differences (stock, risk, economic, etc.) between an all-cash and all-stock transaction? What are the pros and cons of each?

Definition of a provision or a contingent liability : MPA 804 Accounting Theory - Melbourne Polytechnic. Determine whether the bank guarantee meets the definition of a provision or a contingent liability

How many shares should be repurchased : The Dunn Corporation is planning to pay dividends of $480,000. How many shares should be repurchased?

Solve differential equation with the given initial condition : A cell contains a chemical (the solute) dissolved in it at a concentration c(t), and the concentration of the same substance outside the cell is a constant k.

What must the beta be for the other stock in your portfolio : You own a portfolio equally invested in a risk-free asset and two stocks. what must the beta be for the other stock in your portfolio?

Sketch amount of money in the account as a function of time : Suppose $1000 is put into a bank account and earns interest continuously at a rate of i per year, and in addition, continuous payments are made out.

Why people do not care about the cleanliness of the city : Why people do not care about the cleanliness of the city they live in or the surrounding environment like streets and parks.

Common equity capital shares have beta equal : Droz's Hiking Gear, Inc. has found that its common equity capital shares have a beta equal to 1.5 while the risk-free return is 8 %.

Discuss what you would do to prepare for the interview : Discuss what you would do to prepare for the interview, including: what would you research, wear, practice, and bring to the interview?

User Account

All Pages