An Investor has $200,000 invested in a 2-stock portfolio. $60,000 is invested in Stock X and...

An Investor has $200,000 invested in a 2-stock portfolio. $60,000 is invested in Stock X

and the remainder is invested in Stock Y. X's beta is 1.2 and Y’s beta is 1.5. What is the

portfolio's beta?

Expert Solution

Ans 1.27

Stock	INVESTMENT (i)	Beta (ii)	Investment* Beta (i)* (ii)
X	2,00,000	1.20	2,40,000.00
Y	60,000	1.50	90,000.00
Total	2,60,000		3,30,000.00


AVERAGE BETA =	(INVESTMENT * BETA) / TOTAL INVESMENT
	330000 / 260000
	1.27

jeff jeffy answered 2 years ago

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