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Your portfolio is comprised of 40 percent of stock X, 15 percent of stock Y, and...

Your portfolio is comprised of 40 percent of stock X, 15 percent of stock Y, and 45 percent of stock Z. Stock X has a beta of 1.16, stock Y has a beta of 1.47, and stock Z has a beta of 0.42. What is the beta of your portfolio?

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Answer #1

Hi,

Please find the detailed answer as follows:

Beta of the Portfolio = 40%*1.16 + 15%*1.47 + 45%*.42 = .8735 or .87

Answer is .8735 or .87 (if required upto 2 decimal places).

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