Your portfolio is comprised of 36 percent of stock x, 18 percent of stock y, and 46 percent of stock z. stock x has a beta of 1.19, stock y has a beta of .87, and stock z has a beta of 1.26. what is the beta of your portfolio?

Portfolio´s beta: 1.16

Explanation:

Stock         Percent         BetaWeighted Beta

  X                    36%          1,19                   0,43

  Y                    18%         0,87           0,16

  Z                    46%          1,26           0,58

                                                     1,16

The portfolio beta is obtained by the sum of the individual betas of each stock considering it´s  percent on the portfolio (weighted beta).

It represents the relative volatility of a portfolio relative to the market. More than one means more volatile and less than one means less volatile than the market.

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