This preview shows page 1. Sign up to view the full content.
Unformatted text preview: If one of the stocks has a beta of 1.65 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? 4. A stock has an expected return of 17%, the risk-free rate is 5.5%, and the market risk premium is 8%. What must the beta of the stock be? 5. You want to create a portfolio equally as risky as the market and have $500,000 to invest. Complete the following table: Asset Investment Beta Stock A $130,000 .85 Stock B $150,000 1.20 Stock C 1.45 Risk-free asset...
View Full Document
This note was uploaded on 04/06/2011 for the course ACCT 4050 taught by Professor Rodney during the Spring '11 term at University of Georgia Athens.
- Spring '11