ulz. Chapter 8 This Question: 1 pt Time Remaining: 01 20 27 Subeit Quke This Qui

Question

ulz. Chapter 8 This Question: 1 pt Time Remaining: 01 20 27 Subeit Quke This Quir: 10 pts possible o evaluale two possible porolios, which consist of the same twe she has gathered the data shown in the olowing table Calalate the betas for partolios A and Corngwe Po mks ofthese portfolos tothe market as wee as to each oter 0 Data Table b. which posao more may? . The beta tor portbio AIS??Rord to four decrmal paces.) Cok on he Kon located on the topng" ofthe dat. ? node to b. Which portfolio is more resky? (Select the best answer below B. They are the sam 0 78 Toals Print Done Click to select your ans Type here to search

Explanation / Answer

a) The beta of a portfolio is the weighted average beta of the securities which constitute the porfolio.

-Portfolio A

Portfolio Beta = 0.963 (.335+.217+.133+.083+.195)

-Portfolio B

Portfolio Beta = 1.202 (.402+.062+.333+.249+.156)

b) Analysis:

Asset Weight Beta Weight*Beta 1 0.25 1.34 0.335 2 0.35 0.62 0.217 3 0.10 1.33 0.133 4 0.05 1.66 0.083 5 0.25 0.78 0.195

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