What would your portfolio new beta be

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Reference no: EM132002175

1. Stock R has a beta of 1.7, Stock S has a beta of 0.85, the expected rate of return on an average stock is 13%, and the risk-free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. %

2. Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 0.69. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and to use these proceeds to buy another stock with a beta of 1.02. What would your portfolio's new beta be? Round your answer to two decimal places.

Reference no: EM132002175

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