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kirza4 [7]
2 years ago
14

You have a $50,000 portfolio consisting of intel, ge, and con edison. you put $20,000 in intel, $12,000 in ge, and the rest in c

on edison. intel, ge, and con edison have betas of 1.3, 1, and .8, respectively. what is your portfolio beta? question 24 options:
Business
1 answer:
DanielleElmas [232]2 years ago
5 0
The calculation of portfolio beta is done by simply multiplying the percentage of each portfolio with each beta and summing up all the products afterwards.

For intel:
     = ($20,000/$50,000)(1.3) = <em>0.52</em>

For GE:
    = ($12,000/$50,000)(1) = <em>0.24</em>

For Con Edison:
   Portfolio of Con Edison = $50,000 - ($20,000 + $12,000) = <em>$18,000</em>
   = ($18,000/$50,000)(0.8) = <em>0.288

</em>
<em />The portfolio beta is:
<em>   </em><em />PB = 0.52 + 0.24 + 0.288 = 1.048

<em>ANSWER: 1.048</em>
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Largest element is 13 -> C(12,3)*1/1024

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A, B, and C. Division A has the least risk and Division C has the most risk.

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