Finance
posted by brandon .
You would like to create a portfolio that is equally invested in a riskfree asset and two stocks. The one stock has a beta of .80. What does the beta of the second stock have to be if you want the portfolio risk to equal that of the overall market?

A riskfree asset has a beta of 0. The average market beta is 1.0
0.8 + x = 3.0
x = 3  0.8
x = 2.2
Respond to this Question
Similar Questions

calculating BETA
I am having the most trouble with this. Any help or direction would be greatly appreciated. 1) You own a portfolio equally invested in a riskfree asset and two stocks. If one of the stocks has a beta of 1.7 and the total portfolio … 
Investing
You hold a diversifield $ 100,000 portfolio consisting of 20 stocks with 5000 invested in each . The portfolio's beta is 1.12. You plan to sell a stock with b=0.90 and use the proceeds to buy a new stock with b=1.75. what will the … 
Investing ( pease help)
You hold a diversified $ 100,000 portfolio consisting of 20 stocks with 5000 invested in each . The portfolio's beta is 1.12. You plan to sell a stock with b=0.90 and use the proceeds to buy a new stock with b=1.75. what will the portfolio … 
investing
You have a $ 2 million portfolio consisting of $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth one stock with a beta of 0.9 and using the proceeds to purchase … 
Financial Management
You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth of one stock with a beta of 0.9 and using the proceeds … 
Finance
A portfolio consists of three stocks. The weight, expected rate of return and systematic risk for each stock are provided in the following table. Stock Investments Expected return A $7,500 20% B $10,000 15% C $2,500 10% Beta 1.5 1 … 
Finance
You hold a diversified portfolio consisting of a $10,000 investment in each of 15 different common stocks (i.e., your total investment is $150,000). The portfolio beta is equal to 1.1 . You have decided to sell one of your stocks which … 
FIN320
You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each. The portfolio's beta is 1.12. You plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.80. What will the … 
Finance
Currently you own a portfolio comprised of the following three securities. How much of the riskiest security should you sell and replace with riskfree securities if you want your portfolio beta to equal 90 percent of the market beta? 
finance
7500$ investment in each of 20 stocks ( beta of portfolio=1.12). suppose you decide to sell one stock that have beta 1 for 7500$, and use them to buy another one of beta=1.75 calculate the beta of new portfolio ?