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    Calculation of Beta of the portfolio

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    You hold a portfolio of stocks consisting of the following:

    Stock Beta Current Value

    Blackwater Gas 0.5 $10,000
    Tidy Tom's Cleaners 0.7 $5,000
    Globular Grabbus 1.2 $20,000
    Creative Crafts 1.0 $4,000
    Total: $39,000

    a. What is the beta of the portfolio?
    b. You have decided to sell Creative Crafts for $4,000 and to use the proceeds to buy $4,000 of International Steel stock with a beta of 2.5. After the transaction is complete, what will be the new beta of the portfolio? (Disregard any commissions on the buy and sell transactions).

    © BrainMass Inc. brainmass.com September 27, 2022, 10:34 am ad1c9bdddf
    https://brainmass.com/business/beta-and-required-return-of-a-project/calculation-beta-portfolio-473754

    SOLUTION This solution is FREE courtesy of BrainMass!

    Please see the attached excel file.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com September 27, 2022, 10:34 am ad1c9bdddf>
    https://brainmass.com/business/beta-and-required-return-of-a-project/calculation-beta-portfolio-473754

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