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15 September, 00:55

An individual has $ 30,000 invested in a stock with a beta of 0.6 and another $30,000 invested in a stock with a beta of 1.2. if these are the only two investments in her portfolio, what is her portfolio's beta?

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  1. 15 September, 03:17
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    Portfolio beta = 0.9

    Explanation:

    The portfolio beta is the weighted average of the two beta using tge amount invested as the weight.

    Total amount invested = 30,000 + 30,000 = 60,000

    Portfolio beta =

    = (30,000/60,000) * 0.6 + (30,000/600000) * 1.2

    Portfolio beta = 0.9
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