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A Portfolio Comprises Coke (Beta of 1

question 48

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A portfolio comprises Coke (beta of 1.4) and Wal-Mart (beta of 0.8) . The amount invested in Coke is $20,000 and in Wal-Mart is $30,000. What is the beta of the portfolio?


Definitions:

Average Rate

A measure used in finance to represent the typical amount of return or rate over a given period.

Fixed Rate

An interest rate that remains constant over the lifetime of a loan or financial instrument.

Average Tax Rates

It reflects the fraction of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by the total income.

Book Value

Book value is the value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus depreciation.

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