Answer:
1.45
Explanation:
Investment:
Stock B = $20,000
Stock D = $50,000
Stock F = $30,000
Total investment = $20,000 + $50,000 + $30,000
= $100,000
Weight:
= Investment ÷ Total investment
Therefore,
Weight of Stock B:
= $20,000 ÷ $100,000
= 0.2
Weight of Stock D:
= $50,000 ÷ $100,000
= 0.5
Weight of Stock F:
= $30,000 ÷ $100,000
= 0.3
Beta of the portfolio:
= (Weight of Stock B × Beta) + (Weight of Stock D × Beta) + (Weight of Stock F × Beta)
= (0.2 × 1.5) + (0.5 × 2.0) + (0.3 × 0.5)
= 0.30 + 1 + 0.15
= 1.45
