Value of investment in stock


Problem:

You own a $100,000 portfolio that is invested in Stock A and B. The portfolio beta is equal to the market beta. Stock A has a beta of 1.42. Stock B has a beta of 0.88.

Required:

Question: What is the value of your investment in Stock A?

  • $42,333
  • $67,444
  • $77,778
  • $22,222
  • $11.334

Note: Show all workings.

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Finance Basics: Value of investment in stock
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