In: Finance
You have a $100,000 portfolio consisting only of Facebook, Netflix, and Tesla stocks. You put $30,000 in Facebook, $20,000 in Netflix, and the rest in Tesla. Their respective betas are 1.2, 1.1, and 0.9. Your portfolio beta is .
Please enter your answer with TWO decimal points.
Calculation of portfolio beta:
Particulars | Amount invested | Proportion (1) | Beta (2) | Portfolio Beta (3) (1*2) |
Facevalue | 30,000 | 30,000/100,000=0.3 | 1.2 | 0.36 |
Nerflix | 20,000 | 20,000/100,000=0.2 | 1.1 | 0.22 |
Tesla | 50,000 | 50,000/100,000=0.5 | 0.9 | 0.45 |
100,000 | Portfolio Beta | 1.03 |
Portfolio Beta = 1.03