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20 December, 10:35

You own a $36,800 portfolio that is invested in Stocks A and B. The portfolio beta is equal to the market beta. Stock A has an expected return of 22.6 percent and has a beta of 1.48. Stock B has a beta of. 72. What is the value of your investment in Stock A? $13,558 $8,619 $17,204 $14,500 $12,333

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  1. 20 December, 14:27
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    The answer is $13,558

    Explanation:

    βP = 1.0 = 1.48A + [.72 * (1-A) ]

    A =.368421

    Investment in Stock A = $36,800 *.368421 = $13,558
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