Ask Question
18 November, 04:20

For a portfolio of 40 randomly selected stocks, which of the following is most likely to be true? a. The beta of the portfolio is less than the weighted average of the betas of the individual stocks. b. The riskiness of the portfolio is greater than the riskiness of each of the stocks if each was held in isolation. c. The beta of the portfolio is equal to the weighted average of the betas of the individual stocks. d. The riskiness of the portfolio is the same as the riskiness of each stock if it was held in isolation. e. The beta of the portfolio is larger than the weighted average of the betas of the individual stocks.

+5
Answers (1)
  1. 18 November, 06:24
    0
    c. The beta of the portfolio is equal to the weighted average of the betas of the individual stocks.

    Explanation:

    The portfolio beta which is a measure of the systematic risk for a portfolio is calculated by taking the weighted average of betas of all the individual stocks that form up the portfolio. So the statement stating that the portfolio beta is equal to weighted average of individual stock betas is correct.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “For a portfolio of 40 randomly selected stocks, which of the following is most likely to be true? a. The beta of the portfolio is less than ...” 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