A portfolio is comprised of two stocks.Stock A comprises 65 percent of the portfolio and has a beta of 1.31.Stock B has a beta of .98.What is the portfolio beta?
A) 0.98
B) 1.03
C) 1.08
D) 1.19
E) 1.22

Name: A portfolio is comprised of two stocks.Stock A comprises 65 percent of the portfolio and has a beta of 1.31.Stock B has a beta of .98.What is the portfolio beta? A) 0.98 B) 1.03 C) 1.08 D) 1.19 E) 1.22
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Question

Quizplus · Accepted Answer

β_p = (.65 × 1.31) + [(1 - .65) × .98] = .85 + .34 = 1.19

A Portfolio Is Comprised of Two Stocks