Question

Mark owns the following portfolio of securities. What is the beta for the​ portfolio?

Company Beta Percent of Portfolio
Amerigas 0.75 ​10%
Atlantic Industries 1.00 ​55%
TGIS Restaurants 1.55 ​35%

Answer 1

1.1675

Step-by-step explanation:

The computation of the portfolio beta is shown below:

= Stock Amerigas portfolio percentage × stock Amerigas beta + Stock Atlantic Industries portfolio percentage × stock Atlantic Industries beta + Stock TGIS Restaurants portfolio percentage × stock TGIS Restaurants beta

= 0.10 × 0.75 + 0.55 × 1 + 0.35 × 1.55

= 0.075 + 0.55 + 0.5425

= 1.1675

We simply multiplied the portfolio percentage with its beta