Answer: 1.337
Step-by-step explanation:
From the question ,we are informed that someone has a portfolio that is invested 18 percent in Stock A, 42 percent in Stock B, and 40 percent in Stock C while the betas of the stocks are .77, 1.32, and 1.61, respectively.
The beta of the portfolio will be calculated by multiplying the respective beta by their respective weight and then adding the total values gotten together. This will be:
= (18% × 0.77) + (42% ×1.32) + (40% × 1.61)
= (0.18 × 0.77) + (0.42 ×1.32) + (0.4 × 1.61)
= 0.1386 + 0.5544 + 0.644
= 1.337