Your portfolio has a beta of 1.12.The portfolio consists of 40 percent U.S.Treasury bills,30 percent stock A,and 30 percent stock B.Stock A has a risk-level equivalent to that of the overall market.What is the beta of stock B?
A) 1.47
B) 1.52
C) 1.69
D) 1.84
E) 2.73

Question

Quizplus · Accepted Answer

Beta_Portfolio = 1.12 = (0.4 × 0) + (0.3 × 1) + (0.3 × β_B); β_B = 2.73The beta of a risk-free asset is zero. The beta of the market is 1.0.

Your Portfolio Has a Beta of 1