Mrs. Landis has a 2-stock portfolio with a total value of $530,000.  $175,000 is invested in Stock A with a beta of 1.55 and the remainder is invested in Stock B with a beta of 1.25.  What is her portfolio's beta?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 1.17B. 1.35C. 1.59D. 1.27E. 1.46

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Asked Oct 7, 2019
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Mrs. Landis has a 2-stock portfolio with a total value of $530,000.  $175,000 is invested in Stock A with a beta of 1.55 and the remainder is invested in Stock B with a beta of 1.25.  What is her portfolio's beta?

Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.
 
A. 1.17
B. 1.35
C. 1.59
D. 1.27
E. 1.46
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Expert Answer

Step 1

w1 = proportion invested in stock A = 175,000 / 530,000 = 0.3302

w2 = proportion invested in stock B = 1 ...

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