Purchase Solution

Calculate an average beta for your portfolio

Not what you're looking for?

Ask Custom Question

Assume that you hold a portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio beta is equal to 1.12. Now, assume that you decide to sell one of the stocks in your portfolio with a beta equal to 1.0 for $7,500 and use these proceeds to buy another stock for your portfolio. Assume that the new stock's beta is equal to 1.75.

Calculate your portfolio's new beta.

Purchase this Solution

Solution Preview


You are trying to calculate an average beta for your portfolio. Because we do not know all the different stock's betas, we need to make some assumptions. Remember that beta represents volatility of the stock's price movements compared to the beta of the whole index (e.g. S&P ...

Purchase this Solution

Free BrainMass Quizzes
Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.


This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Introduction to Finance

This quiz test introductory finance topics.