You own a stock portfolio invested 20 percent in Stock Q, 25 percent in Stock R,

Question

You own a stock portfolio invested 20 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 30 percent in Stock T. The betas for these four stocks are 1.6, .5, 1.7, and .9, respectively. What is the portfolio beta? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

You own a stock portfolio invested 20 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 30 percent in Stock T. The betas for these four stocks are 1.6, .5, 1.7, and .9, respectively. What is the portfolio beta? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Explanation / Answer

Answer: Calculation of the portfolio of Beta:

Stock Weight Beta Portfolio Beta Q 20% 1.6 0.320 R 25% 0.5 0.125 S 25% 1.7 0.425 T 30% 0.9 0.270 Portfolio Beta 1.140

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