a portfolio comprises coke (beta of 1.6) and wal-mart (beta of 0.6). the amount invested in coke is $10,000 and in wal-mart is $20,000. what is the beta of the portfolio?

Respuesta :

10000 + 20000 = 30000

(10000/30000)(1.6) = 0.53

(20000/30000)(0.6) = 0.4

0.53 + 0.4 = 0.93

the beta of the portfolio is 0.93.

what is portfolio ?

A portfolio is any collection of financial assets, including cash, bonds, and stocks. Individual investors may have portfolios, or they may be managed by financial professionals, hedge funds, banks, and other financial institutions. The idea that a portfolio should be created with the investor's risk appetite, time horizon, and investment goals in mind is one that is widely acknowledged. Each asset's monetary worth may have an impact on the portfolio's risk/reward ratio. The goal is to maximize expected return and minimize risk when deciding on asset allocation. There are numerous effective solutions to this multi-objective optimization issue, and the best one must be chosen by weighing the tradeoff between risk and reward. A portfolio A in particular is controlled by another.

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