Portfolio Beta You have a portfolio with a beta of 135 What

Portfolio Beta You have a portfolio with a beta of 1.35. What will be the new portfolio

beta if you keep 95 percent of your money in the old portfolio and 5 percent in a stock

with a beta of 0.78?

Solution

New portfolio beta = (0.95*1.35)+(0.05*0.78) = 1.32