Sherrie Hymes Holds a $200,000 Portfolio Consisting of the Following

question 136

Multiple Choice

Sherrie Hymes holds a $200,000 portfolio consisting of the following stocks.The portfolio's beta is 0.875.
Stock
Investment
Beta
A
$50,000
0) 50
B
50,000
0) 80
C
50,000
1) 00
D
50,000
1) 20
Total
$200,000
If Sherrie replaces Stock A with another stock,E,which has a beta of 1.50,what will the portfolio's new beta be?

• A) 1.07
• B) 1.13
• C) 1.18
• D) 1.24
• E) 1.30

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