Thomas has a fivestock portfolio that has a market value equal to $400,000. The portfolios beta is
Question:
Thomas has a fivestock portfolio that has a market value equal to $400,000. The portfolio’s beta is 1.5. Thomas is considering selling a particular stock to help pay some university expenses. The stock is valued at $100,000, and if he sells it, the portfolio’s beta will increase to 1.8. What is the beta of the stock Thomas is considering selling?
PortfolioA portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchangetraded and closed funds. A portfolio can also consist of nonpublicly...
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old 15 portfolio value 400000 of the four stocks that remain after sel...View the full answer
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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