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Portfolio betas Personal Finance ProblemRose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. She

Portfolio betasPersonal Finance ProblemRose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. She is particularly interested in using beta to compare the risks of the portfolios, so she has gathered the data shown in the following table:

Portfolio Weights

Asset Asset beta Portfolio A Portfolio B
1 1.78 20% 30%
2 .95 30% 5%
3 1.42 5% 25%
4 1.95 15% 20%
5 .78 30% 20%
Totals 100% 100%

.

a. Calculate the betas for portfolios A and B.

b.Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky?

Question content area bottom

Part 1

a. The beta for portfolio A is

enter your response here.

(Round to four decimal places.)

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