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hat is the beta of the following portfolio? Stock Amount Invested Security Beta A $ 14,200 1.39 B $ 23,900 .98 C $ 8,400 1.52 B) 1.01 A) 1.12 C) 1.05 E) 1.23 D) 1.20

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facundobuzzetti

Answer:

Beta= 1.20

Explanation:

Giving the following information:

Stock Amount Invested Security Beta

A= $14,200 1.39

B= $23,900 .98

C= $8,400 1.52

To calculate the beta for the portfolio, we need to use the following formula:

Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)... + ... (proportion of investment X*beta X)

First, we need to calculate the proportion of investment for each stock:

A= 14,200/46,500= 0.31

B= 23,900/46,500= 0.51

C= 8,400/46,500= 0.18

Beta= (0.31*1.39) + (0.51*0.98) + (0.18*1.52)

Beta= 1.20

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