You are going to invest $18,000 equally in a portfolio consisting of Assets Z, D, and...

You are going to invest $18,000 equally in a portfolio consisting of Assets Z, D, and W, as follows: Calculate the beta of the portfolio containing assets ZDW.

Asset:	Annual Return:	Probability:	Beta:
Z	10%	50%	1.20
D	8%	25%	1.60
W	16%	25%	2.00

1.60
2.40
2.00
1.50

Expert Solution

Ans d. 1.50

Stock	Probability (i)	Beta (ii)	Probability* Beta (i)* (ii)
Z	50.00%	1.20	0.60
D	25.00%	1.60	0.40
W	25.00%	2.00	0.50
		Total	1.50

jeff jeffy answered 6 months ago

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