Author Question: A friend tips you off on a hot stock: Sure Thing Mines Ltd. You only have $10,000 to invest but you ... (Read 62 times)

plus1 · **on:** Apr 25, 2021

A friend tips you off on a hot stock: Sure Thing Mines Ltd. You only have $10,000 to invest but you want to invest more. Assume that you can borrow an additional $5,000 by short-selling the risk free asset (issuing T-Bills). You purchase $15,000 worth of shares in Sure Thing Mines Ltd.
The expected returns and standard deviations of the two assets are outlined in the table below:

Asset	Expected Return	Beta
T-Bills	5.5%	0
Sure Thing Mines	15%	1.70

What is the beta of the portfolio?
◦ 1.50
◦ 1.70
◦ 2.50
◦ 2.55
◦ 2.70

vkodali · **Reply #1 on:** Apr 25, 2021

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