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Find beta of replacement stock to have a new portfolio beta

You are managing a portfolio of 10 stocks which are held in equal amounts. The current beta of the portfolio is 1.64, and the beta of Stock A is 2.0. If Stock A is sold, what does the beta of the replacement stock have to be to have a new portfolio beta of 1.55?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find beta of replacement stock to have a new portfolio beta

Reference No:- TGS0552544

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : What is the real risk-free rate of return

Q : What does market expect will be yield on treasury securities

Q : Necessary it and service investments

Q : Calculate required rate of return for management

Q : Find beta of replacement stock to have a new portfolio beta

Q : Short narrative writing

Q : What are the thirty equal annual payments

Q : How did the european union come into being and develop

Q : Tendency of ratios to fluctuate over time

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find beta of replacement stock to have a new portfolio beta

Reference No:- TGS0552544

Recent Questions Asked Finance Basics

Q : What is the real risk-free rate of return

Q : What does market expect will be yield on treasury securities

Q : Necessary it and service investments

Q : Calculate required rate of return for management

Q : Find beta of replacement stock to have a new portfolio beta

Q : Short narrative writing

Q : What are the thirty equal annual payments

Q : How did the european union come into being and develop

Q : Tendency of ratios to fluctuate over time

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