Final answer:
The beta of a portfolio is determined by calculating the weighted average of the betas of the individual securities within it using their respective investment amounts as weights. The correct multiple-choice option is none of these.
Step-by-step explanation:
The beta of a portfolio is calculated by finding the weighted average of the betas of the individual securities that comprise the portfolio. The weights are based on the proportion of the total portfolio allocated to each security. We will use the provided investment amounts and security betas to compute the portfolio beta.
For security A, the weight is $5,500 divided by the total investment, which includes the amounts invested in securities B and C. Similarly, we calculate the weights for securities B and C. Then, we multiply each security's beta by its corresponding weight and sum these products to find the portfolio beta.
Let's apply the formula: Portfolio Beta = (Weight of A × Beta of A) + (Weight of B × Beta of B) + (Weight of C × Beta of C)
The correct multiple-choice option is none of these.