You own a stock portfolio invested 40 percent in Stock Q, 25 percent in Stock R,
ID: 2634180 • Letter: Y
Question
You own a stock portfolio invested 40 percent in Stock Q, 25 percent in Stock R, 20 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are 0.93, 1.10, 1.10, and 1.28, respectively. What is the portfolio beta? (Round your answer to 2 decimal places. (e.g., 32.16))
You own a stock portfolio invested 40 percent in Stock Q, 25 percent in Stock R, 20 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are 0.93, 1.10, 1.10, and 1.28, respectively. What is the portfolio beta? (Round your answer to 2 decimal places. (e.g., 32.16))
Explanation / Answer
Portfolio beta = weights of each stock*respectibe beta per stock
= 40%*0.93+ 25%*1.10 + 20% * 1.10+ 15%*1.28 =0.372 + 0.275 + 0.22+0.192 = 1.059