You are an investor in common stock, and you currently hold a well-diversified portfolio that has an expected return of 8 percent, a beta of 1.2, and a total value of $12,000. You plan to increase your portfolio by buying 1,000 shares of Bann at $15 a share. Bann has an expected return of 15 percent with a beta of 1.0.

Required:

What will be the expected return and the beta of your portfolio after you purchase the new stock?

Answer rating: 100% (QA)

Value of portfolio before the purchase of new stock V1 12000 Beta of portfolio before the purchas... View the full answer