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Cher owns a portfolio that has a value of 76,100 dollars and consists of 3 stocks. It has 14,600 dollars worth of stock A, wh

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Answer #1

Ans 1.06

Stock Investment (i) Beta (ii) Investment* Beta (i)* (ii)
A                 14,600                         0.52                              7,592.00
B                 15,600                         0.70                            10,920.00
C                 45,900                         1.36                            62,424.00
Total                 76,100                            80,936.00
AVERAGE BETA = (INVESTMENT * BETA) / TOTAL INVESTMENT
80936 / 76100
1.06

Investment on Stock B = No of shares *Price per share =    2600 * 6 = $ 15600

Investment in Stock C = Total Investment - Investment in Stock A - Investment in stock B

                                   = 76100 - 14600 - 15600 = $ 45900

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