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30 October, 08:43

Shirley Paul's 2-stock portfolio has a total value of $100,000. $37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is her portfolio's beta

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  1. 30 October, 09:00
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    Beta = 1.17

    Explanation:

    Giving the following information:

    Shirley Paul's 2-stock portfolio has a total value of $100,000. $37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42.

    To calculate the Beta of the portfolio, we need to use the following formula:

    Beta = (proportion of investment A*beta A) + (proportion of investment B*beta B)

    Beta = (37,500/100,000) * 0.75 + (62,500/100,000) * 1.42

    Beta = 1.17
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Home » Business » Shirley Paul's 2-stock portfolio has a total value of $100,000. $37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is her portfolio's beta
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