You have a $50,000 portfolio consisting of Intel,GE and Con Edison.You put $20,000 in Intel,$12,000 in GE and the rest in Con Edison.Intel,GE and Con Edison have betas of 1.3,1.0 and 0.8 respectively.What is your portfolio beta?
A) 1.048
B) 1.033
C) 1.000
D) 1.037

Question

Quizplus · Accepted Answer

The portfolio beta is a weighted average of the betas of the individual stocks, with the weights being the proportions of the portfolio invested in each stock. In this case, the portfolio beta is:(0.20 * 1.3) + (0.12 * 1.0) + (0.68 * 0.8) = 1.048

You Have a $50,000 Portfolio Consisting of Intel,GE and Con