Purchasing a replacement asset

Reference no: EM13156777

You have been hired as the manager of a portfolio of ten sport asssets that are held in equal dollar amount. the current beta of the portfolio is 1.9 and the beta of asset A is 2.1. if the asset A is sold and the proceeds are used to purchase a replacement asset what beta would the replacement asset have to have to in order to lower the portfolio beta to 1.6.

Reference no: EM13156777

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