(Solution) - You have an 8 million portfolio consisting of a 400 000 -(2025 Original AI-Free Solution)

Discipline:

Type of Paper:

Academic Level: Undergrad. (yrs 3-4)

Paper Format: APA

Pages: 5 Words: 1375

Download Solution ($11.00) Write My Paper Afresh

Buy For $11.00

Paper Details

You have an $8 million portfolio consisting of a $400,000 investment in each of 20 different stocks. The portfolio has a beta equal to 1.1. You are considering selling $400,000 worth of one stock that has a beta equal to 0.9 and using the proceeds to purchase another stock that has a beta equal to 1.9. What will be the new beta of your portfolio following this transaction?