Martin Ortner holds a $200,000 portfolio consisting of the following stocks:

$\begin{array}{lccc}
\text { Stock} & \text { Investment}& \text { Beta} \
\mathrm{A} & \$ 50,000 &0.95\
\mathrm{B} & 50,000 &0.80\
\mathrm{C} & 50,000&1.00 \
\mathrm{D} & 50,000&1.20 \
\text { Total }& \$ 200,000
\end{array}$

What is the portfolio's beta?
A) 0.938
B) 0.988
C) 1.037
D) 1.089
E) 1.143

Question

Martin Ortner holds a $200,000 portfolio consisting of the following stocks:

$\begin{array}{lccc}
\text { Stock}  &  \text { Investment}& \text { Beta} \
\mathrm{A} & \$ 50,000 &0.95\
\mathrm{B} & 50,000 &0.80\
\mathrm{C} & 50,000&1.00 \
\mathrm{D} & 50,000&1.20 \
\text { Total }& \$ 200,000
\end{array}$

What is the portfolio's beta?
A) 0.938
B) 0.988
C) 1.037
D) 1.089
E) 1.143

Quizplus · Accepted Answer

$\begin{array}{l}
\begin{array} { l } 
\text { Stock }&\text { Investment }&\text { Percentade }\
\mathrm{A} &  \$ 50,000 &  25.00 \% \
\mathrm{~B} &  \$ 50,000 &  25.00 \% \
\mathrm{C} &  \$ 50,000 &  25.00 \% \
\mathrm{D} & \$ 50,000 &  \underline{25.00 \%} \
 \text { Total } &  \$ 200,000 &  100.00 \% \
\end{array}
\begin{array} { l } 
\text {Beta}&\text { Product }\
 0.95 & 0.238 \
0.80 & 0.200 \
1.00 & 0.250 \
1.20 & 0.300\
&0.988&=\text { Portfolio bet }
\end{array}
\end{array}$

Martin Ortner Holds a $200,000 Portfolio Consisting of the Following