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What is the beta for a 2 stock portfolio with a 0.54 weight in Walmart stock and the remainder in Amazon

User Shalan
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1 Answer

2 votes

Answer: 0.73

Step-by-step explanation:

Walmart Beta = 0.3616

Amazon's beta = 1.1634

The beta of the portfolio will be a weighted average of the portfolio beta;

= (Walmart beta * Walmart weight) + ( Amazon beta * Amazon weight)

= (0.3616 * 0.54) + ( 1.1634 * (1 - 0.54))

= 0.730428‬

= 0.73

What is the beta for a 2 stock portfolio with a 0.54 weight in Walmart stock and the-example-1