The beta of four stocks—?G, ?H, I, and J—are 0.42?, 0.88?,1.19?, and 1.52?, respectively. What is the beta of a portfolio with the following weights in each? asset: Weight in Stock G Weight in Stock H Weight in Stock I Weight in Stock J Portfolio 1 ?25% ?25% ?25% ?25% Portfolio 2 ?30% ?40% ?20% ?10% Portfolio 3 ?10% ?20% ?40% ?30% What is the beta of portfolio? 1?

Beta of the portfolio the the sum of weigjted beta of each stock. Beta = (0.25*0.42) + (0.25 * 0.88) + ( 0.25 * 1.19) + (0.25* 1.52) = 0.105 + 0.22 + 0.2975 + 0.38 = 1.0025

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The beta of four stocks—?G, ?H, I, and J—are 0

Finance Dec 02, 2020

The beta of four

stocks—?G,

?H, I, and

J—are 0.42?, 0.88?,1.19?,

and 1.52?,

respectively. What is the beta of a portfolio with the following weights in each? asset:

	Weight in Stock G	Weight in Stock H	Weight in Stock I	Weight in Stock J
Portfolio 1	?25%	?25%	?25%	?25%
Portfolio 2	?30%	?40%	?20%	?10%
Portfolio 3	?10%	?20%	?40%	?30%

What is the beta of portfolio? 1?

Expert Solution

Beta of the portfolio the the sum of weigjted beta of each stock.

$Beta = \sum (weight * beta)$

Beta = (0.25*0.42) + (0.25 * 0.88) + ( 0.25 * 1.19) + (0.25* 1.52)

= 0.105 + 0.22 + 0.2975 + 0.38

= 1.0025

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