A portfolio is comprised of two stocks.Stock A comprises 65 percent of the portfolio and has a beta of 1.31.Stock B has a beta of .98.What is the portfolio beta?
A).98
B)1.03
C)1.08
D)1.19
E)1.22

Name: A portfolio is comprised of two stocks.Stock A comprises 65 percent of the portfolio and has a beta of 1.31.Stock B has a beta of .98.What is the portfolio beta? A).98 B)1.03 C)1.08 D)1.19 E)1.22
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Quizplus · Accepted Answer

β_p = (.65 × 1.31) + [(1 - .65) × .98] = .85 + .34 = 1.19

A Portfolio Is Comprised of Two Stocks