Use the following information to answer the question(s)below. The volatility of the market portfolio is 10%,the expected return on the market is 12%,and the risk-free rate of interest is 4%.
-Suppose that Google stock has a beta of 1.06 and Boeing stock has a beta of 1.31.The beta on a portfolio that consists of 30% Google stock and 70% Boeing stock is closest to:
A)1.06.
B)1.14.
C)1.19.
D)1.24.

Question

Use the following information to answer the question(s)below.  The volatility of the market portfolio is 10%,the expected return on the market is 12%,and the risk-free rate of interest is 4%.
-Suppose that Google stock has a beta of 1.06 and Boeing stock has a beta of 1.31.The beta on a portfolio that consists of 30% Google stock and 70% Boeing stock is closest to:
A)1.06. 
B)1.14. 
C)1.19. 
D)1.24.

Quizplus · Accepted Answer

The portfolio beta is calculated as a weighted average of the individual betas: (0.30 * 1.06) + (0.70 * 1.31) = 1.24.

Use the Following Information to Answer the Question(s)below