You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.31 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.31 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 15MC

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You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a
beta of 1.31 and the total portfolio is equally as risky as the market, what must the beta be for the
other stock in your portfolio?

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