What does the beta of the replacement stick

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Reference no: EM131316154

You are managing a portfolio of 10 stocks which are held in equal dollar amounts. The current beta of the portfolio is 1.55, and the beta of stock a is 2.0. If stock A is sold and the proceeds are used to purchase a replacement stock, what does the beta of the replacement stick have to be to change the portfolio beta to 1.7?

A. 4.4

B. 5.3

C. 3.2

D. 3.5

E. 4.1

2. Reliable Cars has sales of $3,800, total assets of $3,350, and a profit margin of 5 percent. The firm has a total debt ratio of 41 percent. What is the return on equity?

A) 12.20 percent

B) 13.83 percent

C) 5.67 percent

D) 9.61 percent

E) 8.47 percent

Reference no: EM131316154

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