Kip owns the following portfolio of securities. What is the beta for t
Kip owns the following portfolio of securities. What is the beta for the portfolio?
Company Beta Percent of Portfolio
Apple .82 50%
Ford 2.53 30%
Federal Express 1.67 20%
A) 1.00
B) 1.50
C) 1.74
D) 1.98
ANSWER
Answer: B
Explanation: B) βp = Σ βi ∗ wi = .82 ∗ 50% + 2.53 ∗ 30% + 1.67 ∗ 20% = 1.50.
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