What should be the Beta of a replacement stock if an investor wishes to achieve a portfolio Beta of 1.0 by replacing Stock C in the following equally weighted portfolio: Stock A = .9 Beta; Stock B = 1.1 Beta; Stock C = 1.35 Beta?
A) 0.93 Beta
B) 1.00 Beta
C) 1.08 Beta
D) 1.15 Beta
Correct Answer:
Verified
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