5)What is the beta of a portfolio consisting of one share of each of the following stocks, given their respective prices and beta coefficients?

Stock Price Beta Investment Weight Portfolio beta:

A $10 1.4 $14.00 11.6% 1.3736 ? (1.284042553 is the correct answer. Just don't know how to get it)

B 24 0.8 $19.20 15.9%

C 41 1.3 $53.30 44.2%

D 19 1.8 $34.20 28.3%

Totals $94 $120.70 100.0%

How would the portfolio beta differ if

(a) the investor purchased 200 shares of stocks B and C for every 100 shares of A and D

Stock Price Beta # of stocks Investment in stock Portfolio beta:

A $10 1.4 100 $1,000.00 $1,400.00 1.29 ? (1.21509434 is the correct answer. Just don't know how to get it)

B 24 0.8 200 $4,800.00 $3,840.00

C 41 1.3 200 $8,200.00 $10,660.00

D 19 1.8 100 $1,900.00 $3,420.00

Totals $15,900.00 $19,320.00

(b) equal dollar amounts were invested in each stock?

Stock Price Beta # of stocks Investment in stock Portfolio beta:

A $10 1.4 100 $1,000.00 $1,400.00 1.29 ? (1.325 is the correct answer. Just don't know how to get it)

B 24 0.8 41.67 $1,000.00 $800.00

C 41 1.3 24.39 $1,000.00 $1,300.00

D 19 1.8 52.63 $1,000.00 $1,800.00

Totals $94 $4,000.00 $5,300.00