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You own a stock portfolio invested 25 percent in Stock Q, 35 percent in Stock R, 35 percent in Stock S, and 5 percent in Stock T. The betas for these four stocks are 1.6, 0.5, 1.7, and 0.8, respectively. What is the portfolio beta

Respuesta :

Answer:

1.57

Explanation:

The computation of portfolio beta is shown below:-

Stock           Stock %            Beta(%)      Weighted Beta (%)

Q                    0.25                 1.6                   0.4

R                     0.35                 0.5                   0.175

S                     0.35                 1.7                    0.595

T                     0.5                   0.8                    0.4

Total                                                                 1.57

To Reach the weighted beta we simply multiply the stock percentage with beta.

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