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31. Your portfolio is 1/3 in T Bills, 1/3 in S&P 500 fund and the rest in XYZ with beta of 1.2. What is the beta or your port
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Answer #1
Beta of Portfolio
Investment Weight Beta Weight * Beta
T-Bill 1/3 0 0
S&P funds 1/3 1 0.33
XYZ 1/3 1.2 0.40
Portfolio Beta = 0.73
Beta of portfolio is weighted average of the betas of the securities
that constitute the portfolio.
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