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a portfolio is made up of stocks A B C D in porportion 20% 30% 25%...

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
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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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