What is the current portfolios beta what would be the


Current Share Price: (Stock A - $46.28) (Stock B - $72.65)

Shares Owned: (Stock A - 54,216) (Stock B - 798)

Expected Return: (Stock A - 4.47%) (Stock B - 16.87%)

Estimated Beta: (Stock A - 0.90) (Stock B - 1.20)

Portfolio Value: $2,567,091.18

Portfolio's Expected Return: 4.75%

T-bill Return/Yield: 2.0%

Target Portfolio Expected Return: 8.0%

How much money would you need to transfer from your current portfolio to the T-bill to reach the target expected return above? Assume that you maintain the ratio of Stock A to Stock B as constant. What is the current portfolio's beta? What would be the portfolio's beta when the T-bill is added? Which of these stocks is the better buy if you hold the stock in a well-diversified portfolio?

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