Does this portfolio have more or less systematic risk than


Consider investment below. Suppose we buy 50 shares of Stock A and 60 shares of Stock B.

Stock

Price

Beta

A

$25

0.9

B

$37

1.1

1. What is the portfolio weight of Stock A?

2. What is the portfolio beta?

3. Does this portfolio have more or less systematic risk than market portfolio? Why?

4. At the end of this year, the price of Stock A is now $30 and the price of Stock B is till $35. If you also spend $975 on Treasury bills, what would the portfolio beta be?

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Does this portfolio have more or less systematic risk than
Reference No:- TGS01362479

Expected delivery within 24 Hours