Paul McLaren holds the following portfolio:
Paul plans to sell Stock A and replace it with Stock E,which has a beta of 0.75.By how much will the portfolio beta change?
A) -0.190
B) -0.211
C) -0.234
D)-0.260
E) -0.286

Question

Paul McLaren holds the following portfolio: 
Paul plans to sell Stock A and replace it with Stock E,which has a beta of 0.75.By how much will the portfolio beta change?
A) -0.190 
B) -0.211 
C) -0.234 
D)-0.260 
E) -0.286

Quizplus · Accepted Answer

11ea42d0_c07b_2cef_9abf_ff65f84026ab_TB2090_00 Change in beta = New F1F1F1S1?F1F1F10 Old = F1F1F1S1?F1F1F100.260 Alternative solution: (b_E F1F1F1S1?F1F1F10 b_A)* %A = -0.260

Paul McLaren Holds the Following Portfolio