A portfolio consists of two stocks and has a beta of 1.07.The first stock has a beta of 1.48 and comprises 38 percent of the portfolio.What is the beta of the second stock?
A).41
B).66
C).82
D)1.28
E)1.35

Name: A portfolio consists of two stocks and has a beta of 1.07.The first stock has a beta of 1.48 and comprises 38 percent of the portfolio.What is the beta of the second stock? A).41 B).66 C).82 D)1.28 E)1.35
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Question

Quizplus · Accepted Answer

1.07 = (.38 × 1.48) + [(1 - .38) × β_B]; β_B = .82

A Portfolio Consists of Two Stocks and Has a Beta