Calculating the portfolio new beta


Suppose you hold a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is to 0.75. Now, suppose you decided to sell one of the stocks in your portfolio with a beta equal to 1.0 for $7,500 and to use these proceeds to buy another stock for your portfolio. Assume the new stock's beta is equal to 1.85. Calculate your portfolio's new beta.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Calculating the portfolio new beta
Reference No:- TGS055313

Expected delivery within 24 Hours