Over the past several weeks you have assembled a small stock portfolio via the purchase of small amounts of different company stocks. You know that the point of a portfolio is to reduce your overall exposure to systematic risk, but aren't sure exactly what the risk of your new portfolio is. You have purchased the following: $6,000 of Tesla Stock, $8,000 of McDonald's Stock, and $10,000 of Boeing Stock. You have estimated the betas of these stocks to be the following: a ẞ of 3.48 for Tesla, a ẞ of 2.19 for McDonald's, and a ẞ of 1.4 for Boeing. What is the beta of your portfolio? (Round to 2 decimals) Answer:
Over the past several weeks you have assembled a small stock portfolio via the purchase of small amounts of different company stocks. You know that the point of a portfolio is to reduce your overall exposure to systematic risk, but aren't sure exactly what the risk of your new portfolio is. You have purchased the following: $6,000 of Tesla Stock, $8,000 of McDonald's Stock, and $10,000 of Boeing Stock. You have estimated the betas of these stocks to be the following: a ẞ of 3.48 for Tesla, a ẞ of 2.19 for McDonald's, and a ẞ of 1.4 for Boeing. What is the beta of your portfolio? (Round to 2 decimals) Answer:
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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Transcribed Image Text:Over the past several weeks you have assembled a small stock portfolio via the purchase of
small amounts of different company stocks. You know that the point of a portfolio is to
reduce your overall exposure to systematic risk, but aren't sure exactly what the risk of your
new portfolio is. You have purchased the following: $6,000 of Tesla Stock, $8,000 of
McDonald's Stock, and $10,000 of Boeing Stock. You have estimated the betas of these
stocks to be the following: a ẞ of 3.48 for Tesla, a ẞ of 2.19 for McDonald's, and a ẞ of 1.4
for Boeing. What is the beta of your portfolio? (Round to 2 decimals)
Answer:
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