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You own a stock portfolio invested 25 percent in Stock Q, 15 percent in Stock R,...

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Finance

You own a stock portfolio invested 25 percent in Stock Q, 15percent in Stock R, 15 percent in Stock S, and 45 percent in StockT. The betas for these four stocks are 1.36, 1.7, 1.3, and 0.48,respectively. What is the portfolio beta?

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Ans 1.01

Stock INVESTMENT (i) Beta (ii) Investment* Beta (i)* (ii)
Q 25%                     1.36                                      0.34
R 15%                     1.70                                      0.26
S 15%                     1.30                                      0.20
T 45%                     0.48                                      0.22
Total 100%                                      1.01

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You own a stock portfolio invested 25 percent in Stock Q, 15percent in Stock R, 15 percent in Stock S, and 45 percent in StockT. The betas for these four stocks are 1.36, 1.7, 1.3, and 0.48,respectively. What is the portfolio beta?

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