In: Finance
You own a stock portfolio invested 15 percent in Stock Q, 25 percent in Stock R, 10 percent in Stock S, and 50 percent in Stock T. The betas for these four stocks are 0.66, 1.18, 1.6, and 1.67, respectively. What is the portfolio beta?
Multiple Choice
1.42
1.36
1.46
1.39
1.32
Ans 1.39
Stock | INVESTMENT (i) | Beta (ii) | Investment* Beta (i)* (ii) |
Q | 15% | 0.66 | 0.10 |
R | 25% | 1.18 | 0.30 |
S | 10% | 1.60 | 0.16 |
T | 50% | 1.67 | 0.84 |
Total | 100% | 1.39 | |