In: Finance
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.
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