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6 July, 10:28

You own a stock portfolio invested 25 percent in Stock Q, 35 percent in Stock R, 35 percent in Stock S, and 5 percent in Stock T. The betas for these four stocks are 1.6, 0.5, 1.7, and 0.8, respectively. What is the portfolio beta

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  1. 6 July, 10:52
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    1.57

    Explanation:

    The computation of portfolio beta is shown below:-

    Stock Stock % Beta (%) Weighted Beta (%)

    Q 0.25 1.6 0.4

    R 0.35 0.5 0.175

    S 0.35 1.7 0.595

    T 0.5 0.8 0.4

    Total 1.57

    To Reach the weighted beta we simply multiply the stock percentage with beta.
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