Stock Investment Beta A $ 50,000 0.95 B 50,000 0.80 C 50,000 1.00 D 50,000 1.20

Question

                                Stock                                        Investment                               Beta
                                          A                                              $ 50,000                                   0.95
                                           B                                                 50,000                                    0.80
                                           C                                                 50,000                                    1.00
                                         D                                                 50,000                                   1.20
                                   Total                                           $200,000

What is the portfolio's beta?

                            a.            0.938                             b.            0.988                             c.            1.037                             d.            1.089                             e.            1.143

Explanation / Answer

portfolio beta = .25*.95+.25*.8+.25*1+.25*1.2 = .988

b) .988

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