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P 12-30 (book/static) EJH has a beta of 12. CSH has a beta of 0.6, and KMS has a beta of 1 If you put 25% of your money in EJH, 25% in CSH, and 50% in KMS, what is the beta of your portfolio? The beta of your portfolio iRound to two decimal places.)

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Answer #1

We need to calculate the weighted average beta as per weights provided:

Asset Beta Weight Weighted Beta
EJH 1.2 25% 0.3 (1.2*25%)
CSH 0.6 25% 0.15 (0.6*25%)
KMS 1 50% 0.5 (1*50%)
Beta 0.95

The Beta of portfolio is 0.95

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