The beta of any portfolio can be computed as the
A) slope of the security market line
B) sum of the betas for each asset held in the portfolio divided by the number of assets in the portfolio.
C) the standard deviation of the expected returns of the portfolio minus the risk-free rate.
D) weighted average of the betas for each asset held in the portfolio.

Question

Quizplus · Accepted Answer

The beta of a portfolio is a weighted average of the betas of the individual assets held in the portfolio. The weights are determined by the proportion of each asset in the portfolio. Therefore, the correct choice is D – weighted average of the betas for each asset held in the portfolio.

The Beta of Any Portfolio Can Be Computed as the