Question
Asked Nov 4, 2019
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You own $25,080 of Human Genome stock that has a beta of 3.72. You also own $13,376 of Frozen Food Express (beta = 1.87) and $3,344 of Molecular Devices (beta = 0.46).

What is the beta of your portfolio? (Round your answer to 2 decimal places.)

Portfolio beta: ___.__%

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Expert Answer

Step 1

To determine the portfolio beta we first need to calculate the weights of each investment.

Step 2
Total portfolio value=Sum of all the individual investments
-25080+13376+3344=41800
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Total portfolio value=Sum of all the individual investments -25080+13376+3344=41800

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Step 3
Weight of Human Genome stock in the portfolio (Amount invested) (Portfolio value)
-25080 41800-0.6
Weight of Frozen Food Express stock in the portfolio-(Amount invested) (Portfolio value)
-13376 41800-0.32
Weight of Molecular Devices stock in the portfolio-(Amount invested) (Portfolio value)
3344 41800-0.08
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Weight of Human Genome stock in the portfolio (Amount invested) (Portfolio value) -25080 41800-0.6 Weight of Frozen Food Express stock in the portfolio-(Amount invested) (Portfolio value) -13376 41800-0.32 Weight of Molecular Devices stock in the portfolio-(Amount invested) (Portfolio value) 3344 41800-0.08

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