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You own a stock portfolio invested 15 percent in Stock Q, 20 percent in Stock R,...

You own a stock portfolio invested 15 percent in Stock Q, 20 percent in Stock R, 5 percent in Stock S, and 60 percent in Stock T. The betas for these four stocks are 0.71, 0.99, 0.53, and 0.63, respectively. What is the portfolio beta?
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Answer #1
Beta of portfolio = sum of weighted average beta of individual stock
computation of portfolio beta -
Stock weight beta Weight * Beta
Q 15% 0.71          0.11
R 20% 0.99          0.20
S 5% 0.53          0.03
T 60% 0.63          0.38
Total 100%          0.71
Therefore portfolio beta =          0.71
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