Martin ortner holds a $200,000 portfolio consisting of the following stocks:

stock investment beta
a $50,000 0.95
b 50,000 0.80
c 50,000 1.00
d 50,000 1.20
total $200,000

what is the portfolio's beta? select one:

(a) 0.938
(b) 0.988
(c) 1.037
(d) 1.089
(e) 1.143

The portfolio's beta is 0.988

Explanation:

Hi, since all stocks account for the same amount ($50,000), and there are 4 stocks in total, each stock´s proportion in the portfolio is 25%.

In order to find the portfolio´s beta, we need to calculate the weighted average of the stock´s beta, that is:

Everything should look like this.

So, the portfolio´s beta is 0.988 (option B).

Best of luck.

Ou te manaʻomia togi o lea o le a na o le a tuʻu iai ni upu le masani ai o loʻo iai sou aso sili ona lelei. Ona toe foliga faigata lea ma ou te faʻamoemoe e te maua le fesoasoani e te manaʻomia. :)

Step-by-step explanation: