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# Calculation of Porfolio’s New Beta

## Overview

Suppose you hold a diversified portfolio consisting of a \$10,000 invested equally in each of 10 different common stocks. The portfolio's beta is 1.12. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 2.10. What would the portfolio's new beta be?

Financial Consolidation Accounting

Crane Mechanics acquired 75 percent of Downey Enterprises on March 31, 2005, for \$3,645,000. Downey’s book value at that date totaled \$4,000,000. Appraisal values were greater than book values for identifiable assets in the following amounts: Inventory (\$300,000) and Plant and Equipment (\$700,000). The purchase differential for Inventory is to be…

Date release: May 30, 2013

Calculation, Porfolio’s, Beta, Homework, Help, Classof1, download, ePub, TXT, Papyre FB2

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