If you hold a portfolio made up of the following shares: Investment Value Beta
Share A $2,000 1.5
Share B $5,000 1.2
Share C $3,000 .8
What is the beta of the portfolio?
A)1.17
B)1.14
C)1.32
D)Can't be determined from information given

Question

Quizplus · Accepted Answer

The portfolio beta is calculated as the weighted average of the individual betas. The weights are the proportion of each investment in the total portfolio. The total portfolio value is $10,000. The portfolio beta is (2000/10000)*1.5 + (5000/10000)*1.2 + (3000/10000)*0.8 = 1.14.

If You Hold a Portfolio Made Up of the Following