CBA has a beta of 1.6 and WPL has a beta of 1.8.Given this,calculate the beta for a portfolio consisting of 65% in CBA and 35% in WPL.

A) $ 0.65 $
B) $ 1.10 $
C) $ 1.30 $
D) $ 1.67 $

Question

CBA has a beta of 1.6 and WPL has a beta of 1.8.Given this,calculate the beta for a portfolio consisting of 65% in CBA and 35% in WPL.

A) $ 0.65 $
B) $ 1.10 $
C) $ 1.30 $
D) $ 1.67 $

Quizplus · Accepted Answer

To calculate the portfolio beta,we simply weigh the beta by the weights invested in each asset,giving (0.65 F1F1F1S1F1F1F10 1.6)+ (0.35 F1F1F1S1F1F1F10 1.8)= 1.67.

CBA Has a Beta of 1 0.65 0.65 0.65 B) 1.10 1.10 1.10

CBA Has a Beta of 1 $0.65$ B) $1.10$