Mary currently manages a $500,000 portfolio. She is expecting to receive an additional $250,000 from a new client. The existing portfolio has a required return of 10.75%. The risk-free is 4% and the return on the market is 9%. If Mary wants the required return on the new portfolio to be 11.5%, what should be the average beta for the new stocks added to the portfolio? Question: What is the equation and how to work through this problem to get the correct average beta?
Paper#11960 | Written in 18-Jul-2015Price : $25