An individual has 40000 invested in a stock with a beta of 0

An individual has $40,000 invested in a stock with a beta of 0.4 and another $55,000 invested in a stock with a beta of 2.3. If these are the only two investments in her portfolio, what is her portfolio\'s beta? Round your answer to two decimal places.

It is known that, s1*b1 +s2*b2 = (s1 + s2) * b where, s1 = investment in stock 1 s2 = investment in stock 2 b1 = beta of stock1 b2 = beta of stock2 b = beta of combined investment. So, 40000*0.4 + 55000*2.3 = 95000*b b = (16000+126500)/95000 = 1.5 (ANSWER)

An individual has 40000 invested in a stock with a beta of 0

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