Question

You have a portfolio that is equally invested in Stock F with a beta of .91, Stock G with a beta of 1.33, and the risk-free asset. What is the beta of your portfolio?

Answer 1

Portfolio beta =0.7467

Step-by-step explanation:

Weight of each asset = 100% / 3 = 33.33%

Portfolio beta = Respective beta * Respective weight

Portfolio beta = (1/3*0.91)+((1/3*1.33)+(1/3*0)

Portfolio beta = 0.746666666

Portfolio beta = 0.7467

Hence, the beta of the portfolio 0.7467.