Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. assume that you hold a. diversified 90,000 portfol

Assume that you hold a. diversified 90,000 portfolio with a beta of 1.20 and that you...

70.2K

Verified Solution

Question

Finance

Assume that you hold a. diversified 90,000 portfolio with a betaof 1.20 and that you are in the process of buying 1000 shares of ahigh tech stock at $10 a share with beta of 1.70 and adding it tothis portfolio. also assume that risk free rate is 2% and that theexpected rate of return on the market is 10.0% based of the CAPMwhat would be the expected rate of return. for your portfolio afterthe purchase of this stock

Answer & Explanation Solved by verified expert
4.4 Ratings (844 Votes)
Step 1 Portfolio BetaThe beta of a portfolio is the weighted average beta of    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Assume that you hold a. diversified 90,000 portfolio with a betaof 1.20 and that you are in the process of buying 1000 shares of ahigh tech stock at $10 a share with beta of 1.70 and adding it tothis portfolio. also assume that risk free rate is 2% and that theexpected rate of return on the market is 10.0% based of the CAPMwhat would be the expected rate of return. for your portfolio afterthe purchase of this stock

Other questions asked by students

Q

TYPED RESPONSE ONLY WITH AT LEAST 1 REFERENCE: List four factors that can shift the position of...

Chemistry
Q

How does the stomata control transpiration in plants?

Biology
Q

What is an ecological footprint and how is it related to an area of land

Biology
Q

Two identical slabs of a given metal are joined together in two different ways as...

Physics
Q

Determine two coterminal angles in degree measure one positive and one negative for each angle...

Calculus
Q

12 Which of the followings is the solution of the initial value problem y 3y...

Algebra
Q

Use the Rational Zero Theorem to list all possible rational zeros of the given polynomial...

Algebra
Q

T/F. 4. In a perpetual inventory system, when merchandise is returned by the buyer to...

Accounting
Q

In one or two sentences, what do you think training and development plans offer the...

Accounting
Q

Hansen Company has prepared a budgeted income statement. Reported were the following amounts. 1. Sales...

Accounting
Q

A defendant set off fireworks at a fully-licensed Fourth of July show. The result of...

Accounting
Q

A European call option on a stock with a current price of $30 has an...

Finance