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How do calculate the portfolio beta

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Reference no: EM132631478

Corporation holds a diversified portfolio consisting of $6000 investment in each of 20 different common stocks. In which 15 stocks has a beta equal to 1.50 and the remaining 5 are in line with the market (i.e. average risky stocks).

Problem (i) Calculate the Portfolio's Beta

Now suppose above mentioned corporation has decided to sell one of the stocks in its portfolio with a beta equal to 1.0 for $6000 and used these proceeds to buy another stock for its portfolio. Assume that new stocks beta is equal to 1.75. Calculate your portfolio's new beta.

Reference no: EM132631478

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