Question

the beta of stock a, stock b, stock C are 1.6, 1.2, and 0.8 respectively if you invest 50% of stock a 25% of Stock B and stock C what is a beta of your investment

Answer 1

1.30

Step-by-step explanation:

Beta of Investment = Beta of Stock A* Weightage of Stock A + Beta of Stock B* Weightage of Stock B + Beta of Stock C* Weightage of Stock C

Stock Beta (A) Weightage (B) Beta of Investment (A*B)

A 1.6 0.50 0.80

B 1.2 0.25 0.30

C 0.8 0.25 0.20

Total 1.30

So, the beta of the investment is 1.30