Jeanne Lewis is attempting to evaluate 2 possible portfolios consisting of the same 5 assets but held
Question:
Jeanne Lewis is attempting to evaluate 2 possible portfolios consisting of the same 5 assets but held in different proportions. She is particularly interested in using beta to compare the risk of the portfolios and, in this regard, has gathered the following data:
a. Calculate the betas for portfolios A and B.
b. Compare the risk of each portfolio to the market as well as to each other. Which portfolio is more risky?
Transcribed Image Text:
Portfolio Weights (%) PortfolioA Portfolio B Asset Asset Beta 1.3 0.7 1.25 1.1 0.9 10 30 10 10 40 100 30 10 20 20 20 100 4 Total
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a Asset Beta w A w A b A w B w B b B A 130 010 0130 030 039 B 070 030 0210 010 007 C 125 ...View the full answer
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Related Book For
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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