Assume that you have $165,000 invested in a stock whose beta is 1.25,$85,000 invested in a stock whose beta is 2.35,and $235,000 invested in a stock whose beta is 1.11.What is the beta of your portfolio?
A) 1.37
B) 2.01
C) 1.85
D) 1.57

Question

Quizplus · Accepted Answer

The portfolio beta is calculated as the weighted average of the individual stock betas. The weights are the proportion of the total investment in each stock. The calculation is: (165,000/485,000)*1.25 + (85,000/485,000)*2.35 + (235,000/485,000)*1.11 = 1.37.

Assume That You Have $165,000 Invested in a Stock Whose