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9 September, 15:44

g An individual has $20,000 invested in a stock with a beta of 0.8 and another $50,000 invested in a stock with a beta of 1.6. If these are the only two investments in her portfolio, what is her portfolio's beta

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  1. 9 September, 16:03
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    1.37

    Explanation:

    The computation of the portfolio beta is shown below:

    Value Weight Beta Weighted Beta

    of Investment of Investment (weight of value * beta)

    $20,000 0.2857 0.8 0.22856

    $50,000 0.7143 1.6 1.14288

    Total = $70,000 1 1.37

    We simply multiplied the weight of investment with the beta of each investment so that the portfolio beta could come
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