An individual has $50,000 invested in a stock with a beta of 0.4 and another $60,000 invested in a stock with a beta of 1.1. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.

Given : Investment in stock A = $50,000

            Beta of stock A = 0.4

            Investment in stock B = $60,000

            Beta of stock B = 1.1

To Find: Portfolio Beta

Solution: Beta of a security may be defined as degree of responsiveness of security return with respect to the market return. Beta of a portfolio is the weighted average beta of the securities comprising such a portfolio.

Total investment in portfolio = $50,000 + $60,000 = $110,000

Weightage of security A in portfolio, i.e  = = 0.4545

Weightage of security B in the portfolio, i.e = = 0.5455

Beta of porfolio = Beta of A × + Beta of B ×

                          = 0.4 × 0.4545 + 1.1 × 0.5455

                          = 0.7818

Hence, the portfolio beta is 0.78 approx.

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hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )