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You construct a portfolio with the following three assets: 45% invested in US t…

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Wize University Introduction to Finance Textbook > CAPM

Beta

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You construct a portfolio with the following three assets:
  • 45% invested in US treasury bills
  • 35% invested in the market portfolio
  • 20% invested in Stock X with a beta of 1.5
What is the portfolio beta?
More Beta Questions:
Your $16,000 portfolio is invested equally into 12 stocks and has an average beta of 1.87. You decide to sell Stock A and Stock B which have betas of 1.5 and -0.9 and invest that money into t-bills. What is your new portfolio beta?
You have $12,000 invested in a portfolio containing 8 stocks and an average beta of 2.3. Stock X makes up 14% of your portfolio and has a beta of 1.5. You decide to sell Stock X and invest that money into the market portfolio, what is your new portfolio beta?
The correlation between a stock and the market is -0.85. The stock has a standard deviation of 14% and the market has a standard deviation of 20%. What is the beta of the stock?
The covariance between a stock and the market is 0.04. The stock has a standard deviation of 14% and the market has a standard deviation of 20%. What is the beta of the stock?
Beta measures ___________
T-bills have a beta of ___
The market beta is