Bill Dukes has $100,000 invested in a 2-stock portfolio.$35,000 is invested in Stock X and the remainder is invested in Stock Y.X's beta is 1.50 and Y's beta is 0.70.What is the portfolio's beta?
A)0.65
B)0.72
C)0.80
D)0.89
E)0.98

Question

Quizplus · Accepted Answer

The portfolio's beta is calculated as the weighted average of the individual betas: (35,000/100,000)*1.50 + (65,000/100,000)*0.70 = 0.525 + 0.455 = 0.98.

Bill Dukes Has $100,000 Invested in a 2-Stock Portfolio