Answer:
The portfolio beta is [tex]\alpha = 1.354[/tex]
Step-by-step explanation:
From the question we are told that
The first investment is [tex]i_1 = \$ 25,000[/tex]
The first beta is [tex]k = 0.8[/tex]
The second investment is [tex]i_2 = \$ 40,000[/tex]
The second beta is [tex]w = 1.7[/tex]
Generally the portfolio beta is mathematically represented as
[tex]\alpha = \frac{ i_1 * k + i_2 * w }{ i_1 + i_2}[/tex]
substituting values
[tex]\alpha = \frac{ (25000 * 0.8) + ( 40000* 1.7 ) }{40000 + 25000}[/tex]
[tex]\alpha = 1.354[/tex]
