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You own a stock portfolio invested 30 percent in Stock Q, 14 percent in Stock R, 40 percent in Stock S, and 16 percent in Stock T. The betas for these four stocks are .99, 1.05, 1.45, and 1.90, respectively.
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32 votes
32 votes
You own a stock portfolio invested 30 percent in Stock Q, 14 percent in Stock R, 40 percent in Stock S, and 16 percent in Stock T. The betas for these four stocks are .99, 1.05, 1.45, and 1.90, respectively. What is the portfolio beta

User Rbm
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1 Answer

11 votes
11 votes

Answer:

the portfolio beta is 1.33

Step-by-step explanation:

The computation of the portfolio beta is shown below:

= respective percentage × respective betas

= 0.30 × 0.99 + 0.14 × 1.05 + 0.40 × 1.45 + 0.16 × 1.90

= 0.297 + 0.147 + 0.58 + 0.304

= 1.328

= 1.33

Hence, the portfolio beta is 1.33

The same should be considered and relevant too

User Tamilsweet
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2.9k points
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