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Sliva [168]
3 years ago
9

Suppose you put half of your money in Monster Beverage and half in IBM. What would the beta of this combination be if Monster Be

verage has a beta of 1.52 and Pepsi has a beta of .55?
A. 0.75
B. 1.00
C. 1.04
D. 0.55
E. 0.35
Business
1 answer:
Artemon [7]3 years ago
7 0

Answer:

C. 1.04

Explanation:

The computation of the portfolio beta is as follows:

Portfolio beta = respective beta × respective weight

= (1.52 × 0.5) + (0.55 × 0.5)

= 1.04

hence, the portfolio beta is 1.04

Therefore the correct option is C.

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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