Suppose Stan holds a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.25. Now suppose Stan decided to sell one of his stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35. What would the portfolio's new beta be?
A. 1.17
B. 1.23
C. 1.29
D. 1.36
E. 1.43
Answer: C
You might also like to view...
Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann respectively and 10% interest on original capital. If they agree to share remaining profits and losses on a 3:2 ratio, what will Singer's share of the income be if the income for the year was $50,000?
A) $24,000 B) $22,000 C) $16,000 D) $23,400
Refer to the following selected financial information from Troy Manufacturing. Compute the company's current ratio. Current Assets306,450 Plant assets388,000 Current Liabilities107,800 Net sales676,000 Net Income75,000
A. 3.60. B. 6.27. C. 2.84. D. 1.44. E. 6.44.
PERT and CPM both seek to find the ________ sequence of activities in a project.
What will be an ideal response?
Which of the following statements is correct??
A. ?The probability of default is higher on short -term bonds than on long-term bonds. B. ?Reinvestment rate risk is lower, other things held constant, on long-term than on short-term bonds. C. ?According to the market segmentation theory, the yield curve is expected to slope downward. D. ?Borrowers prefer to borrow on a short-term basis, as a result, the yield curve is downward sloping. E. ?If the inflation was expected to decrease in the future, then the yield curve would have an upward slope.