You decide to invest $20,500 in Bank of America and $14,500 in Twitter. What is the portfolio's beta? Bank of America beta: 1.27 Twitter beta: 1.96

Bp = 1.56

Explanation:

Giving the following information:

You decide to invest $20,500 in Bank of America and $14,500 in Twitter.

Bank of America beta: 1.27 Twitter beta: 1.96

We need to use the following formula:

Bp = Wa*Ba + Wb*Bb

W = weighted average invest

B = beta

Bp = (20,500/35,000) * 1.27 + (14,500/35,000) * 1.96 = 1.56