You own a stock portfolio invested 20 percent in Stock Q, 20 percent in Stock R,

Question

You own a stock portfolio invested 20 percent in Stock Q, 20 percent in Stock R, 15 percent in Stock S, and 45 percent in Stock T. The betas for these four stocks are 1.52, 1.64, 1.67, and 1.4, respectively. What is the portfolio beta?

1.44

1.59

1.48

1.54

1.51

You own a stock portfolio invested 20 percent in Stock Q, 20 percent in Stock R, 15 percent in Stock S, and 45 percent in Stock T. The betas for these four stocks are 1.52, 1.64, 1.67, and 1.4, respectively. What is the portfolio beta?

1.44

1.59

1.48

1.54

1.51

Explanation / Answer

Portfolio beta is weighted average of the beta of the constiuents or stocks included in the portfolio.

In this question,

Portfolio beta = (20% * 1.52) + (20% * 1.64) + (15% * 1.67) + (45% * 1.4) = 1.5125

Hence, Answer is 1.51 (Last Option)

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.