Question

a
portfolio is made up of stocks A B C D in porportion 20% 30% 25%
and 25% and non diversifable risk are measured by their bets .4,
1.2, 2.5, 1.75, what is the portfolio beta

Answer #1

Portfolio Beta is the Weighted Average Beta

Weighted Average = Beta of Portfolio A * Weight of A + Beta of Portfolio B * Weight of B+ Beta of Portfolio C * Weight of C + Beta of Portfolio D * Weight of D

= 0.4 * 20% + 1.2 * 30% + 2.5 * 25% + 1.75 * 25%

**= 1.5025**

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