What is the beta of a portfolio consisting of 1 share of each of the following stocks given their re

What is the beta of a portfolio consisting of 1 share of each of the following stocks given their re

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What is the beta of a portfolio consisting of 1 share of each of the following stocks given their respective prices and beta coefficients? Stock Price Beta Number stocks Investment in Stock A $10 1.4 1 $10 x 1.4 = $14.00 B $24 0.8 1 $24 x .08 = $19.20 C $41 1.3 1 $41 x 1.3 = $53.30 D $19 1.8 1 $19 x 1.8 = $34.20 Total $94 / $120.7 = 1.28 Portfolio beta How would the portfolio beta differ if (a) the investor purchased 200 shares of stock B and C for every 100 shares of A and D Stock Price Beta Number stocks Investment in Stock A $10 1.4 100 $1,000 x 1.4 = $1,400
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Unformatted text preview: B $24 0.8 200 $4,800 x .08 = $3,840 C $41 1.3 200 $8,200 x 1.3 = $10,660 D $19 1.8 100 $1,900 x 1.8 = $3,420 Total $15,900 / $19,320 = 1.22 Portfolio beta (b) equal dollar amounts were invested in each stock? Stock Price Beta Number stocks Investment in Stock A $10 / 1.4 100 $1,000 x 1.4 = $1,400 B $24 / 0.8 41.67 $1,000 x .08 = $800 C $41 / 1.3 24.39 $1,000 x 1.3 = $1,300 D $19 / 1.8 52.63 $1,000 x 1.8 = $1,800 Total $4,000 / $5300 = 1.33 Portfolio beta...
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