You invest $200 in security A with a beta of 1.4 and $800 in security B with a beta of 0.3.The beta of the resulting portfolio is
A)1.40.
B)1.00.
C)0.52.
D)1.08.

Question

Quizplus · Accepted Answer

To find the beta of a portfolio, you need to sum up the product of the weight of each security and its corresponding beta. 
So, the beta of the portfolio can be calculated as:
(0.2 x 1.4) + (0.8 x 0.3) = 0.28 + 0.24 = 0.52
Therefore, the best choice is C, as it represents the calculated beta of the portfolio.

You Invest $200 in Security a with a Beta of 1.4