Problem 9 - => 1.545 - 1.2 = 0.2x =>...

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Problem 9 – Quiz #4 Solution First we calculate the new beta for the fund:  13 = 4.5 + Beta*5.5  => 1.545 = Beta  Now  1.545 = (20/25)*1.5 + (5/25)x 
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Unformatted text preview: => 1.545 - 1.2 = 0.2x => 1.727 = x Thus the average beta of the new stocks added must be 1.727....
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