You are planning to buy two stocks to create portfolio

Finance Nov 18, 2020

You are planning to buy two stocks to create portfolio. One is the very-stable old-world company Proctor & Gamble (PG). Assume PG's beta equals 0.60. The other stock is high-flying new-world company Tesla (TSLA). Assume TSLA's beta equals 1.36. You will invest an equal amount of money in each stock. What is the beta of your planned portfolio?

Expert Solution

Hence, the beta of the portfolio = 0.98

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