You hold the following portfolio,consisting of Assets A,B and C.What is the portfolio beta?

A) 0.75
B) 1.00
C) 1.05
D) 1.15
E) 1.25

Name: You hold the following portfolio,consisting of Assets A,B and C.What is the portfolio beta? A) 0.75 B) 1.00 C) 1.05 D) 1.15 E) 1.25
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Question

You hold the following portfolio,consisting of Assets A,B and C.What is the portfolio beta?

A) 0.75 
B) 1.00 
C) 1.05 
D) 1.15 
E) 1.25

Quizplus · Accepted Answer

Take the weighted average of the individual betas to find the portfolio beta. β_p = w₁β₁ + . . . + w_nβ_n β_p = (0.20 × 0.75) + (0.40 × 1.0) + (0.40 × 1.25) β_p = 0.15 + 0.40 + 0.50 = 1.05

You Hold the Following Portfolio,consisting of Assets A,B and C