You own a portfolio equally invested in a risk-free asset and two stocks. If one of thestocks has a beta of 1.26 and the total portfolio is equally as risky as the market, whatmust the beta be for the other stock in your portfolio? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)Stock beta

Here, Beta of one stock = 1.26 Total no. of stocks in the portfolio = 3 Weights of each stock = 1/3…

Answered: You own a portfolio equally invested in…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 25P

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