You Are Managing a Portfolio of 10 Stocks Which Are

question 69

Multiple Choice

You are managing a portfolio of 10 stocks which are held in equal amounts.The current beta of the portfolio is 1.64,and the beta of Stock A is 2.0.If Stock A is sold,what would the beta of the replacement stock have to be to produce a new portfolio beta of 1.55?

• A) 1.10
• B) 1.00
• C) 0.90
• D) 0.75
• E) 0.50

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