Megan Ross holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50,000 0.80 C...

Megan Ross holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50,000 0.80 C 100,000 1.00 D 75,000 1.20 Total $375,000 What is the portfolio's beta? a. 1.06 b. 1.29 c. 1.56 d. 1.42 e. 1.17

Expert Solution

Ans e) 1.17


STOCK	BETA	INVESTMENT	INVESTMENT * BETA
A	1.40	150000	2,10,000
B	0.80	50000	40,000
C	1.00	100000	1,00,000
D	1.20	75000	90,000
TOTAL		375000	4,40,000

AVERAGE BETA =		(INVESTMENT*BETA)/ TOTAL INVESTMENT
		440000 / 375000
		1.17

jeff jeffy answered 2 years ago

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