Question
In: Finance
in your two-stock portfolio, you invest $25 in stock a and $75 in stock B. if...
in your two-stock portfolio, you invest $25 in stock a and $75 in stock B. if the beta of stock A is 1.31 and the beta of stock b is 1.39 your portfolio wold be:
Solutions
Expert Solution
Ans 1.37
| Stock | INVESTMENT (i) | Beta (ii) | Investment* Beta (i)* (ii) |
| A | 25 | 1.31 | 32.75 |
| B | 75 | 1.39 | 104.25 |
| Total | 100 | 137.00 | |
| AVERAGE BETA = | (INVESTMENT * BETA) / TOTAL INVESMENT | ||
| 137 / 100 | |||
| 1.37 | |||
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