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sertanlavr [38]
2 years ago
3

You have a portfolio that is invested 17 percent in Stock R, 38 percent in Stock S, and the remainder in Stock T. The beta of St

ock R is .62, and the beta of Stock S is 1.17. The beta of your portfolio is 1.28. What is the beta of the Stock T?
Business
1 answer:
Ilya [14]2 years ago
4 0

Answer:

Beta of stock T is 0.0152

Explanation:

Given data:

weight of stock R is 17%

weight of stock S is 38%

hence weight of stock T is = 100 - (17+38) = 45%

Beta of stock R is = 0.62

Beta of stock S is = 1.17

Beta of portfolio is 1.28

we know beta of portfolio is given as

Beta of portfolio = weight of R × Beta of R + weight of S × Beta of S +weight of T × Beta of T

putting all value to get desired value of Beta of T1.28 = .17\times 0.62 + .38 \times 1.17 + 48 \times Beta_T

Beta of stock T is 0.0152

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