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Take a Test-Oshayne Whittingham -Google Chrome Secure l https//www.mathalcom/Student/PlayerTest.aspx?testid-172873572¢ erwinayes Principles of Business Finance Test:Exam 2 Time Remaining: 02:4048 Submit Test This Question: 1 pt 360, 41(7 complete) This Test: 41 pts possible You are considering a portfolio of three stocks with 30% of your money invested in company X, 45% of your money in estadin company Y and 25% of your money invested in company Z. If the betas for each stock are 1 226r company X. 1 46 or company Y and 1.03 for company Z, what is the portfolio beta? O A. 100 OB. 124 O C. 1.33 D. 1.20

Explanation / Answer

Portfolio beta is the weighted average of individual betas.

Portfolio beta = 0.3*1.22 + 0.45*1.46 + 0.25*1.03 = 1.28

Option D.

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