Answered: Assume your portfolio consists of 50%…

Assume your portfolio consists of 50% of a stock with a beta of 1.436 and 50% of a stock with a beta of 0.532, what is the beta of your portfolio? (Hin: Weighted average)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

100%

Assume your portfolio consists of 50% of a stock with a beta of 1.436
and 50% of a stock with a beta of 0.532, what is the beta of your
portfolio? (Hint: Weighted average)

Expert Solution

Step 1

Given,

Beta of stock 1 is 1.436

Beta of stock 2 is 0.532

Weight of each stock is 50%

Step by step

Solved in 2 steps

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