Securities A, B, and C have betas of 1.2, 1.3, and 1.7, respectively. What is the beta of an equally weighted portfolio of all three?
A) 1.15
B) 1.40
C) 1.55
D) 1.60

Name: Securities A, B, and C have betas of 1.2, 1.3, and 1.7, respectively. What is the beta of an equally weighted portfolio of all three? A) 1.15 B) 1.40 C) 1.55 D) 1.60
Brand: Quizplus
Rating: 4.9 (38 reviews)

Question

Quizplus · Accepted Answer

The beta of an equally weighted portfolio is the average of the betas of the individual securities. Therefore, (1.2 + 1.3 + 1.7) / 3 = 1.40.

Securities A, B, and C Have Betas of 1