One way to forecast a portfolio's beta is to first forecast the betas of the individual stocks in the portfolio and then sum the individual forecasted betas, weighted by the market value of each stock.

Question

Quizplus · Accepted Answer

The portfolio's beta is calculated by taking the weighted average of the individual stocks' betas, not by summing them. Each stock's beta is multiplied by its proportion in the portfolio, and then these products are summed.

One Way to Forecast a Portfolio's Beta Is to First