An individual has $50,000 invested in a stock with a beta of 0.3 and another $40,000...

An individual has $50,000 invested in a stock with a beta of 0.3 and another $40,000 invested in a stock with a beta of 2.5. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.

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Expert Solution

Total investment = 50000 + 40000 = 90000

Portfolio beta = Weight of stock 1 * Beta of stock 1 + Weight of stock 2 * Beta of stock 2

= (50000/90000)*0.30 + (40000/90000)*2.50

= 1.28

jeff jeffy answered 1 year ago

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