Problemyou own a 210000 portfolio that is invested in stock, Ask an Expert

Accounting

Problem:

You own a $210,000 portfolio that is invested in stock A and B. The portfolio beta is equal to the market beta. Stock A has an expected return of 18.7 percent and has a beta of 1.42. Stock B has a beta of 0.88.

Required:

Question: What is the value of your investment in stock A?

A) $38,600
B) $42,333
C) $44,500
D) $46,667
E) $47,200

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166898

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