Your portfolio contains $20,000 of Air Canada stock,which has a beta of 1.4,and $30,000 of WestJet stock,which has a beta of 1.8.What is the beta of your portfolio?

Question

Quizplus · Accepted Answer

Beta of portfolio= (Weight of Air Canada x Beta of Air Canada) + (Weight of WestJet x Beta of WestJet)
                = [(20,000/50,000) x 1.4] + [(30,000/50,000) x 1.8]
                = 0.56 + 1.08
                = 1.64

Therefore, the answer is A) 1.64.

Your Portfolio Contains $20,000 of Air Canada Stock,which Has a Beta