Ask Question
30 May, 20:05

Jim Angel holds a $200,000 portfolio consisting of the following stocks: Stock - Investment - Beta A - $ 50,000 - 0.95 B - 50,000 - 0.80 C - 50,000 - 1.00 D - 50,000 - 1.20 Total = $200,000 What is the portfolio's beta?

+5
Answers (1)
  1. 30 May, 20:37
    0
    The portfolio's beta is 0.9875.

    Explanation:

    Beta is a systematic risk. Portfolio beta is weightage average of beta of all investment in the portfolio. It is calculated as below.

    As an investment equal to $ 50,000 is made in each of four type of stock. So weightage of 25% (200,000/50,000) will be assign to each stock when calculating entire portfolio beta.

    Portfolio Beta = 25% * 0.95 + 25% * 0.8 + 25%*1 + 25%*1.2

    Portfolio Beta = 0.2375 + 0.2 + 0.25 + 0.3

    Portfolio Beta = 0.9875
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Jim Angel holds a $200,000 portfolio consisting of the following stocks: Stock - Investment - Beta A - $ 50,000 - 0.95 B - 50,000 - 0.80 C ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers