Question

In: Finance

An individual has $25,000 invested in a stock with a beta of 0.3 and another $40,000...

An individual has $25,000 invested in a stock with a beta of 0.3 and another $40,000 invested in a stock with a beta of 1.4. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.

Solutions

Expert Solution

Portfolio beta = Weighted average brts of sto

Portfolio beta = [25,000(0.30) + 40,000(1.40)]/75,000

Portfolio beta = 0.85


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