Question: A $ 3 6 , 0 0 0 portfolio is invested in a risk - free security and two stocks. The beta of Stock A

A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of Stock A is 1.29 while the beta of Stock B is .90. One-half of the portfolio is invested in the risk free security. How much is invested in Stock A if the beta of the portfolio is .61? A. $14,769 B. $12,872 C. $17,004 D. $12,000 E. $15,000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

The open end of a cylindrical tank 2 ft in diameter and 3 ft high is submerged in water as shown. If the tank weights 250 lb, to what depth h will the tank submerge? The air barometric pressure is...

Q:

I attached an excel file with the questions, Any help on these would be greatly appreciated. 1. A stock has an expected return of 16.5 percent, the risk-free rate is 4.2 percent, and the market risk...

Q:

6. You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 2.1, and the total portfolio is exactly as risky as the market, what must the beta be...

Q:

Page 4 of 5 Question 10 (7 points) You own a portfolio equally invested in a risk free asset and stocks A, B and C. Your portfolios beta of 1.2. If stock A has a beta of 18 and stock B is equally as...

Q:

Can you please answer these problems, I need the answer within the next 36 hours. Thanks. 1. Suppose a stock had an initial price of $72 per share, paid a dividend of $2.60 per share during the year,...

Q:

Answers the questions in the word file, show steps if needed FIN 305 Homework 4 (Last Name Q - Z) Due Wed. Oct 18th by 5p 1) An asset had returns of 6 percent, -9 percent, 2 percent, and 12 percent...

Q:

There are 3 stocks in a portfolio: Stock A, Stock B, and Stock C. The portfolio has a return of 3.3%. You are given below the weight of each stock in the portfolio and rate of return. What is the...

Q:

Your portfolio consists of 250 shares of Stock K with a current market price of $40 per share, 150 shares of Stock Q with a current market price of $25 per share and $8,000 invested in the risk free...

Q:

QUESTION 1 A stock has an expected return of 13.8 percent, the risk-free rate is 1.3 percent, and the market risk premium is 7.1 percent. What must the beta of this stock be? QUESTION 2 A stock has a...

Q:

I have all of the answers just want to make sure to be able to solve them correctly. #7 is 11.2516%. Principles of Finance FALL 2012 Exam IV Name...................................... The following...

Q:

How do you solve 6 and 9 in detail thank you Questions and Problems sack Betas (L03, CFA) A stock has an ex 3.5 percent 2 percent, the risk-free ratei risk premium is 7.5 percent. What must the beta...

Q:

Ontario Garden Supplies uses a perpetual inventory system. Ontario Garden Supplies has these account balances at May 31, 2010, prior to making the year-end adjustments: A year ago, the replacement...

Q:

9018 Ques:- Find value of (29) divided by 7. 1

Q:

Mossfeet Shoe Corporation is a single product firm. The corrparry is predicting that a price increase neat year will not cause unit sales to decrease. What effect would this price increase have on...

Q:

An investment project has annual cash flows of $4,200, $5,300, $6,100 and $7,400, and a discount rate of 14%. What is the discount payback period for these cash flows if the initial cost is $7,000?...

Q:

A population starts at size 1000 and grows with per capita production rt that alternates between 0.6 and 1.5. In each of the above populations, per capita production changes over time according to a...

Q:

Calculating Payback Old Country, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept...

Q:

At the beginning of the period, the Assembly Department budgeted direct labor of $123,500 and property tax of $10,000 for 6,500 hours of production. The department actually completed 7,300 hours of...

Q:

Annual revenue for Corning Supplies grew by 5.5% in 2011; 1.1% in 2012; 23.5% in 2013; 21.1% in 2014; and 1.8% in 2015. What is the mean growth annual rate over this period?

Q:

The parties and attorneys attend an informal meeting with the judge in her chambers and discuss resolution of the case. What is this proceeding called? A pretrial motion A settlement conference A...

Q:

1. Dr. Tim Muehlhoff quoted the following statement from The Miracle of Dialogue: I cannot hear you because of what I expect you to say. Recall some instances in your own life where you have been...

Q:

2. Dr. Muehlhoff also noted that he had seen a book entitled, What Would Machiavelli Do? The Ends Justify the Meanness He then suggested that there are many people we might pick as our ethical...

Q:

1. Go to your library or an online database, such as Gale or InfoTrac College Edition, that provides full articles from academic journals. Read this article: Elise Dallimore, Julie Hertenstein, and...