Answer:
Beta of Portfolio is 0.98
Explanation:
Given: Investment in security X = $35,000
Investment in security Y = $65,000
Beta of X = 1.5
Beta of Y = 0.70
Beta is a measure of degree of responsiveness of a security return with respect to market return.
The portfolio beta is the weighted average beta of individual stock beta's in a portfolio.
Beta of portfolio = Beta of Stock X × Weightage of money invested in X + Beta of Y × Weightage of money invested in Y
Beta of Portfolio = 1.50 × [tex]\frac{35,000}{100000}[/tex] + 0.7 × [tex]\frac{65000}{100000}[/tex]
Beta of Portfolio = 0.525 + 0.455 = 0.98
