Paul McLaren Holds the Following Portfolio Paul Plans to Sell Stock a and Replace It with r

question 91

Multiple Choice

Paul McLaren holds the following portfolio: $$\begin{array} { c r r } \text { Stock } & \text { Investment } & \text { Beta } \\\hline \text { A } & \$ 150,000 & 1.40 \\\text { B } & 50,000 & 0.80 \\\text { C } & 100,000 & 1.00 \\\text { D } & 75,000 & 1.20 \\\text { Total } & \underline{\$ 375,000} &\end{array}$$ Paul plans to sell Stock A and replace it with Stock E,which has a beta of 0.75.By how much will the portfolio beta change?

• A)?0.190
• B)?0.211
• C)?0.234
• D)?0.260
• E)?0.286

---

Definitions:

Price Inelastic

Describes a situation where the demand for a good or service does not significantly change with a change in its price.

Trail Bikes

are specifically designed bicycles for off-road cycling, built to handle rugged trails and terrain.

Customizes

Refers to the process of making or altering something according to the user's individual preferences or needs.

Dynamic Pricing

A pricing strategy that allows businesses to adjust prices in real-time based on market demand, competition, and other factors.