1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
eduard
3 years ago
7

Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio'

s beta is 1.31. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buy another stock with a beta of 0.97. What would your portfolio's new beta be? Do not round intermediate calculations. Round your answer to two decimal places.
Business
1 answer:
MA_775_DIABLO [31]3 years ago
4 0

Answer:

The new portfolio beta is 1.31 rounded off to two decimal places.

Explanation:

The portfolio beta is a function of the sum of the weighted average betas of the individual stock's that form up the portfolio. The portfolio beta is calculated using the following formula,

Portfolio beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N

Where,

  • w is the weightage of each stock in the portfolio

The beta of the portfolio when one stock with a beta of 1 is sold is,

The sum of individual stock betas for 19 stocks is = 20 * 1.31  -  1 * 1  = 25.2

The new portfolio beta when one stock with a beta of 0.97 is added is,

Portfolio beta = (25.2 + 0.97) / 20

Portfolio beta = 1.3085 rounded off to 1.31

You might be interested in
The main source of revenue for local governments is _____.
AleksandrR [38]

Answer:

the main sources of revenue for local government is property taxes

3 0
3 years ago
When should you forward instead of replying to an email
dolphi86 [110]

Answer:

C. When the recipient was not included on the original email.

Explanation:

This is the correct option because forwarding allows the new recipient to see the email that was sent if they were not originally included.

~theLocoCoco

5 0
3 years ago
A homeowner from State A hired a contractor from State B to build a vacation home for her in State C. The parties signed the con
Katen [24]

Answer:

The Home owner commenced the action in a state A court ( C )

Explanation:

The Defendant ( the contractor)  can decide to transfer the case from a state court to a federal court within the same state in which the case was filled by the The home owner  if the federal court has the Jurisdiction to rule on the case

Since the contract was signed in state A under the laws of the state the case is definitely a state case and the Homeowner's move to remand the case to a state court with the argument that the Federal court lacks proper Jurisdiction is in order. The court decision on the matter will be based on the fact that the Homeowner commenced the action in a state A court where the contract was signed.

6 0
3 years ago
In the summer of 2002, the euro was valued at slightly less than US$1. By 2008, it had risen to an all-time high of $1.60, but i
Kisachek [45]

The answer is foreign currency fluctuations.

Foreign currency fluctuations are basically the change in the values of currencies based on the demand of that currency.

In other words, the more the number of investors invests in the stocks regulated by the stock market to buy exports of any country, the more will be the value of the currency of that particular country and vice versa.

Foreign currency fluctuation occurs for all floating currencies all over the world.

Since in the given case, the value of the euro changes from US$1 to US$1.60 from 2002 to 2008 respectively.

Hence, this change in value is called Foreign currency fluctuations.

Learn more about Demand:

brainly.com/question/1245771

#SPJ4

8 0
2 years ago
A typical grocery store in the United States may sell oranges grown primarily in California during part of the year and oranges
Rama09 [41]

In United States, the oranges are available round the year because the grocery stores sell oranges that are grown in locations with similar climates but different growing seasons.

<u>Explanation</u>:

Orange is a seasonal fruit. The growth of orange can be witnessed from November to April in the United States of America. The supply of orange will reach its peak during January-March.

Oranges are good source of vitamin C and are rich in nutrition. The antioxidant in the orange helps in lowering the risk of heart disease and kidney stones.

In United States, the oranges are available round the year because the grocery stores sell oranges that are grown in locations with similar climates but different growing seasons.

4 0
3 years ago
Other questions:
  • A small economy increased its capital per hour worked (k/l ) from $40,000 to $50,000. As a result, real GDP per worker (Y/L) gre
    6·1 answer
  • Which of the following was the result in Larry S. Lawrence v. Bainbridge Apartments, the case in the text in which the window wa
    14·1 answer
  • To what extent do stakeholders influence a plan and subsequent implementation of organization restructuring that accommodates ch
    11·1 answer
  • Which of the following would be an effective way to let a national producer of children’s toys know that its products are substa
    11·1 answer
  • Which of the following is an example of a career in public safety?
    13·2 answers
  • You own 10,000 shares of Microsoft stock. A good way to hedge the risk involved in owning this stock would be to buy some call o
    12·1 answer
  • Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its
    13·2 answers
  • Accounts receivable written-off as uncollectible during the year amounted to $12,600. The accounts receivable balance at the beg
    5·1 answer
  • Preston Industries has two separate divisions. Each division is in a separate line of business. Division A is the largest divisi
    7·1 answer
  • Which of the following is not a type of qualitative forecasting?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!