If we put a of our wealth into asset X, with systematic risk of x, and b of our wealth into asset Y, with systematic risk of y, then the beta of the resulting portfolio, p, is simply the weighted average of the betas of individual securities Prove the equation portfolio bate P a x b y ...

This can be proved using CAPM model According to CAPM model Expected return Risk fr ...

If we put a % of our wealth into asset X, with systematic risk of x, and

Question:

If we put a % of our wealth into asset X, with systematic risk of βx, and b% of our wealth into asset Y, with systematic risk of βy, then the beta of the resulting portfolio, βp, is simply the weighted average of the betas of individual securities: Prove the equation portfolio bate βP = a βx + b βy.

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