What is the beta of a portfolio comprised of the following securities?
$$\begin{array} { | l | l | l |}
\hline \text { Shure } & \text { Amorugt Inverted } & \text { Serurity Bete } \
\hline \text { A } & € 2,000 & 1.20 \
\hline \mathrm { B } & €{ 3,000 } & 1.46 \
\hline \mathrm { B } & €{ 5 } , 000 & .72 \
\hline
\end{array}$$
A)1.008
B)1.014
C)1.038
D)1.067
E)1.127

Question

What is the beta of a portfolio comprised of the following securities?
$$\begin{array} { | l | l | l |} 
\hline \text { Shure } & \text { Amorugt Inverted } & \text { Serurity Bete } \
\hline \text { A } & € 2,000 & 1.20 \
\hline \mathrm { B } & €{ 3,000 } & 1.46 \
\hline \mathrm { B } & €{ 5 } , 000 & .72 \
\hline
\end{array}$$
A)1.008
B)1.014
C)1.038
D)1.067
E)1.127

Quizplus · Accepted Answer

The portfolio beta is calculated by taking the weighted average of the individual betas. The weights are the proportion of the total investment in each security. The total investment is €10,000. The portfolio beta is (2000/10000)*1.20 + (3000/10000)*1.46 + (5000/10000)*0.72 = 1.038.

What Is the Beta of a Portfolio Comprised of the Following