You invest 6% of your money in Stock A, -2% in Stock B, and the remainder...
You invest 6% of your money in Stock A, -2% in Stock B, and the remainder in Stock C. Stock A has a beta of 0.1, Stock B has a beta of 1.2, and Stock C has a beta of 0.4. What is the beta of your portfolio?
Homework Answers
Portfolio beta= Weight of stock A*beta of stock A + Weight of stock B*beta of stock B + Weight of stock C*beta of stock C
= 0.06*0.1 – 0.02*1.2 + 0.96*0.4
= 0.0060 – 0.0240 + 0.3840
= 0.3660
Therefore, the beta of my portfolio is 0.3660.
In case of any query, kindly comment on the solution
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