Question
In your portfolio, you have two stocks. You have a 50% investments in Stock A and 50% investment in Stock B. Stock A has a
In your portfolio, you have two stocks. You have a 50% investments in Stock A and 50% investment in Stock B. Stock A has a standard deviation of 25% and a beta of 1.2. Stock B has a standard deviation of 35% and a beta of 0.80. The correlation between Stock A and Stock B is 0.4.
What is the beta of the portfolio?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the beta of a portfolio you can use the following formula betaportfolio wA b...
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Step: 2
Step: 3
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
