The following portfolio has an expected return of ________% and a beta of ________.
$\begin{array}{cccc}
\text { Security }&\text {Amount Invested }&\text {Expected Return}&\text { Beta }\
\mathrm{X} & \$ 17,000 & 14.28 & .98 \
\mathrm{Y} & \$ 12,000 & 7.8 & 1.33 \
\mathrm{Z} & \$ 11,000 & 9.5 & 1.07
\end{array}$
A)10.53; 1.13
B)10.99; 1.11
C)11.03; 1.28
D)11.16; 1.11
E)11.11; 1.16

Question

Quizplus · Accepted Answer

The expected return is calculated as a weighted average of the returns: $(17000/40000) \times 14.28 + (12000/40000) \times 7.8 + (11000/40000) \times 9.5 = 10.99\%$. The beta is also a weighted average: $(17000/40000) \times 0.98 + (12000/40000) \times 1.33 + (11000/40000) \times 1.07 = 1.11$.

The Following Portfolio Has an Expected Return of ________% and a Beta