You own 500 shares of Stock A at a price of $80 per share, 690 shares of Stock B
ID: 2715004 • Letter: Y
Question
You own 500 shares of Stock A at a price of $80 per share, 690 shares of Stock B at $95 per share, and 250 shares of Stock C at $37 per share. The betas for the stocks are 1.3, 1.4, and .7, respectively. What is the beta of your portfolio? (Do not round intermediate calculations. Round your answer to 2 decimalplaces.)
You own 500 shares of Stock A at a price of $80 per share, 690 shares of Stock B at $95 per share, and 250 shares of Stock C at $37 per share. The betas for the stocks are 1.3, 1.4, and .7, respectively. What is the beta of your portfolio? (Do not round intermediate calculations. Round your answer to 2 decimalplaces.)
Explanation / Answer
Value of stock A = 500*80 i.e 40000
Value of stock B = 690*95 i.e 65550
Value of stock C = 250*37 i.e 9250
Total Value = Value of stock A + 40000+65550+9250 i.e 114800
Beta of portfolio = (40000/114800*1.3 )+(65550/114800*1.4)+(9250/114800*0.70)
= 0.4529+0.80+0.0564
= 1.30875
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