Portfolio betas Personal Finance Problem Rose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. She is particularly interested in using beta to compare the risks of the portfolios, so she has gathered the data shown in the following table: E. a. Calculate the betas for portfolios A and B. b. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky? a. The beta for portfolio A is (Round to four decimal places.) O Data Table (Click on the icon here a in order to copy the contents of the data table below into a spreadsheet.) Portfolio weights Asset beta Portfolio A Portfolio B Asset 1 1.16 20% 25% 2 0.74 35% 15% 3 1.26 10% 15% 4 1.84 5% 20% 5 0.95 30% 25% Totals 100% 100% Print Done
Portfolio betas Personal Finance Problem Rose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. She is particularly interested in using beta to compare the risks of the portfolios, so she has gathered the data shown in the following table: E. a. Calculate the betas for portfolios A and B. b. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky? a. The beta for portfolio A is (Round to four decimal places.) O Data Table (Click on the icon here a in order to copy the contents of the data table below into a spreadsheet.) Portfolio weights Asset beta Portfolio A Portfolio B Asset 1 1.16 20% 25% 2 0.74 35% 15% 3 1.26 10% 15% 4 1.84 5% 20% 5 0.95 30% 25% Totals 100% 100% Print Done
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:Portfolio betas Personal Finance Problem Rose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different
proportions. She is particularly interested in using beta to compare the risks of the portfolios, so she has gathered the data shown in the following table:
a. Calculate the betas for portfolios A and B.
b. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky?
a. The beta for portfolio A is
(Round to four decimal places.)
Data Table
(Click on the icon here in order to copy the contents of the data table below
into a spreadsheet.)
Portfolio weights
Asset beta Portfolio A Portfolio B
20%
Asset
1
1.16
25%
2
0.74
35%
15%
1.26
10%
15%
4
1.84
5%
20%
0.95
30%
25%
Totals
100%
100%
Print
Done
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