You hold the positions in the following table. What is the beta of your portfolio?
$$\begin{array} { l r r r r }
& \text { Price } & \text { Shares } & \text { Beta } \
\text { TechNo Comp. } & \$ 15.25 & 2000 & 4.0 \
\text { Delivery Corp. } & \$ 105.00 & 500 & 1.4 \
\text { Computer Corp. } & \$ 35.40 & 300 & 0.9 \
\text { Food Corp. } & \$ 18.75 & 200 & -0.7
\end{array}$$
A) 1.4
B) 2.08
C) 2.13
D) 5.6

Question

You hold the positions in the following table. What is the beta of your portfolio?
$$\begin{array} { l r r r r } 
& \text { Price } & \text { Shares } & \text { Beta } \
\text { TechNo Comp. } & \$ 15.25 & 2000 & 4.0 \
\text { Delivery Corp. } & \$ 105.00 & 500 & 1.4 \
\text { Computer Corp. } & \$ 35.40 & 300 & 0.9 \
\text { Food Corp. } & \$  18.75 & 200 & -0.7
\end{array}$$
A) 1.4
B) 2.08
C) 2.13
D) 5.6

Quizplus · Accepted Answer

The beta of a portfolio is calculated by taking the weighted average of the betas of the individual investments, where the weights are proportional to the value of each investment in the portfolio. The calculation is as follows:1. Calculate the total value of each position:    - TechNo Comp.: $15.25 * 2000 = $30,500   - Delivery Corp.: $105.00 * 500 = $52,500   - Computer Corp.: $35.40 * 300 = $10,620   - Food Corp.: $18.75 * 200 = $3,7502. Calculate the total value of the portfolio:    - Total = $30,500 + $52,500 + $10,620 + $3,750 = $97,3703. Calculate the weighted beta for each position:   - TechNo Comp.: ($30,500 / $97,370) * 4.0 = 1.253   - Delivery Corp.: ($52,500 / $97,370) * 1.4 = 0.754   - Computer Corp.: ($10,620 / $97,370) * 0.9 = 0.098   - Food Corp.: ($3,750 / $97,370) * (-0.7) = -0.0274. Sum the weighted betas to get the portfolio beta:   - Portfolio Beta = 1.253 + 0.754 + 0.098 - 0.027 = 2.078Rounding to two decimal places, the portfolio beta is approximately 2.08.

You Hold the Positions in the Following Table A) 14 B) 2

You Hold the Positions in the Following Table A) 14
B) 2