Problem 23

Intro

The table below shows the betas and portfolio weights for 3 stocks:

		Portfolio weights
Stock	Beta	Portfolio 1	Portfolio 2
A	2	0.3	0.1
B	1.1	0.5	0.4
C	0.4	0.2	0.5

Calculate the beta of each portfolio.

Attempt 1/10 for 10 pts.

Part 1

What is the beta of portfolio 1?

Attempt 1/10 for 10 pts.

Part 2

What is the beta of portfolio 2?

Attempt 1/5 for 10 pts.

Part 3

If you are more concerned about risk than return, which portfolio should you pick?

Portfolio 2

Portfolio 1