Bob and Mary own the same assets in each of their portfolios. Each has a different allocation of their investments across the various securities contained in the portfolio. The portfolios of Bob and Mary must have equal betas because they are investing in the same securities, just in different proportions.

A. True

B. False

Question

Flores

Social Studies

21 March, 21:46

Bob and Mary own the same assets in each of their portfolios. Each has a different allocation of their investments across the various securities contained in the portfolio. The portfolios of Bob and Mary must have equal betas because they are investing in the same securities, just in different proportions.

A. True

B. False

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Answers (1)

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Jordan Freeman · Answer 1

B) False

Explanation:

Portfolio betas are the weighted average of the each of their asset betas that comprise the portfolio. If you change the weights, you could change the portfolio beta as well.