You hold the positions in the following table.What is the beta of your portfolio?
A) 1.4
B) 2.08
C) 2.13
D) 5.6

Question

You hold the positions in the following table.What is the beta of your portfolio? 
A) 1.4 
B) 2.08 
C) 2.13 
D) 5.6

Quizplus · Accepted Answer

For the portfolio, determine the total value of the portfolio and the weights of each stock in the portfolio:
Total value = $15.25 × 2,000 + $105.00 × 500 + $35.40 × 300 + $18.75 × 200 = $97,370.
TechNo weight = $15.25 × 2,000/$97,370 = 31.32%.
Delivery weight = $105 × 500/$97,370 = 53.92%.
Computer weight = $35.40 × 300/$97,370 = 10.91%.
Food weight = $18.75 × 200/$97,370 = 3.85%.
Now compute the portfolio beta = 0.3132 × 4.0 + 0.5392 × 1.4 + 0.1091 × 0.9 + 0.0385 × −0.7 = 2.07892.

You Hold the Positions in the Following Table