You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The

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answerhappygod
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You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The

Post by answerhappygod »

You are considering the construction of a portfolio comprised of
equal investments in each of four different stocks. The betas for
each stock are found​ below:
Asset
Beta
A
2.30
B
0.90
C
0.45
D
        −1.40
​(Click
on the icon
in order to copy its contents into a
spreadsheet.​)
a.  What is the portfolio beta for your proposed
investment​ portfolio?
b.  How would a 25 percent increase in the expected return on
the market impact the expected return of your​ portfolio?
c.  How would a 25 percent decrease in the expected return on
the market impact the expected return on each​ asset?
d.  If you are interested in decreasing the beta of your
portfolio by changing your portfolio allocation in
two​ stocks, which stock would you decrease and which would
you​ increase? ​ Why?
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