Question

You hold a portfolio consisting of three assets (A, B, and C). You own $25,000 of...

You hold a portfolio consisting of three assets (A, B, and C). You own $25,000 of asset A, $35,000 of asset B, and $40,000 of asset C. What is the portfolio beta is equal to if the beta for asset A is 1.25, the beta for asset B is 0.75, and the beta for asset C is 0?

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Answer #1
Stock Value × Beta Portfolio
A      25,000 1.25           31,250
B      35,000 0.75           26,250
C      40,000 0                   -  
100,000           57,500
/ portfolio value        100,000
Portfolio beta               0.58

Answer is 0.58

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