Beta of Jonathans’s Portfolio
Beta of Jonathans’s Portfolio = [Beta of Stock X x Percentage of the amount invested in Stock X] + [Beta of Stock Y x Percentage of the amount invested in Stock Y] + [Beta of Stock Z x Percentage of the amount invested in Stock Z]
= [0.78 x 25%] + [0.85 x 40%] + [1.70 x 35%]
= 0.20 + 0.33 + 0.60
= 1.13
“Hence, the Beta of Jonathans’s Portfolio will be 1.13”
10) Jonathan has the following portfolio of assets. Stock X Y Z Proportion of Portfolio Beta...
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