Please answer both parts of the question and explain if possible. Jerry\'s portf
ID: 2669017 • Letter: P
Question
Please answer both parts of the question and explain if possible.
Jerry's portfolio is Inverted equally in five stocks (that is, each stock in the portfolio has a weight of 0.20) and ha* a required return of 9.4%. The risk-free rate is 5% and the market risk premium is 4% What is the portfolio's beta* Assume that Jerry's portfolio is on the SMI. The last stock added to this portfolio Is Lauren Clothing Co., which has a beta of 0.60. What was the portfollo's beta before Lauren's stock was added? (Mint: Remember that It was a four-stock portfolio before the last stock was added.)Explanation / Answer
The first answer I believe is 1.10 The second question is 1.050