Tom Noel Holds the Following Portfolio Tom Plans to Sell Stock a and Replace It with

question 64

Multiple Choice

Tom Noel holds the following portfolio: $\begin{array}{lrl}\text { Stock }&\text { Investment }&\text { Beta }\\\mathrm{A} & \$ 150,000 & 1.40 \\\mathrm{~B} & \$ 50,000 & 0.80 \\\mathrm{C} & \$ 100,000 & 1.00 \\\mathrm{D} & \$ 75,000 & 1.20\\\text { Total }&\$375,000\end{array}$
Tom plans to sell Stock A and replace it with Stock E,which has a beta of 0.80.By how much will the portfolio beta change? Do not round your intermediate calculations.

• A) -0.240
• B) -0.194
• C) -0.290
• D) -0.271
• E) -0.230

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