New Portfolio Beta After Selling
Not what you're looking for?
Nicole holds three stocks in her portfolio: A, B, and C. The portfolio beta is 1.40. Stock A comprises 15% of the dollar value of her holdings and has a beta of 1.0. If Nicole sells all of her investment in A and invests the proceeds in the risk-free asset, her new portfolio beta will be:
a. 0.60
b. 0.88
c. 1.00
d. 1.25
Purchase this Solution
Solution Summary
The solution calculates the portfolio beta after an investment in a stock is sold out and the proceeds invested in the risk-free asset with a few lines of explanation.
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Introduction to Finance
This quiz test introductory finance topics.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.