You have decided to invest in an equally weighted portfolio consisting of Bank of America, Proctor & Gamble, Home Depot, and Tesla and need to find the beta of your portfolio

Finance Nov 27, 2020

You have decided to invest in an equally weighted portfolio consisting of Bank of America, Proctor & Gamble, Home Depot, and Tesla and need to find the beta of your portfolio. Go to finance.yahoo.com, find the ticker symbol of each company and thereby find the beta of each company. Please list the beta for each stock and illustrate how you calculate the beta of the entire portfolio. Without adding new assets, how would you adjust the portfolio to make it more aggressive? Less aggressive? Be specific in your answers!

Expert Solution

ANSWER

SHARE	BETA
BANK OF AMERICA	1.57
POCTOR AND GAMBLE	0.4
HOME DEPOT	1.12
TESLA	1.97

portfolio beta of equal share = sum of all beta / no. of share

portfolio beta= 1.57 + 0.4 + 1.12 + 1.97 = 1.265

To make portfolio aggressive we will add high beta share = TESLA

To make portfolio less aggressivewe will add low beta share = POCTOR AND GAMBLE

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