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25 February, 17:28

Mark owns the following portfolio of securities. What is the beta for the portfolio?

Company Beta Percent of Portfolio

Amerigas 0.75 10%

Atlantic Industries 1.00 55%

TGIS Restaurants 1.55 35%

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  1. 25 February, 17:35
    0
    1.1675

    Explanation:

    The computation of the portfolio beta is shown below:

    = Stock Amerigas portfolio percentage * stock Amerigas beta + Stock Atlantic Industries portfolio percentage * stock Atlantic Industries beta + Stock TGIS Restaurants portfolio percentage * stock TGIS Restaurants beta

    = 0.10 * 0.75 + 0.55 * 1 + 0.35 * 1.55

    = 0.075 + 0.55 + 0.5425

    = 1.1675

    We simply multiplied the portfolio percentage with its beta
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