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A Portfolio Contains Four Assets

question 61

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A portfolio contains four assets.Asset 1 has a beta of .7 and represents 35 percent of the portfolio.Asset 2 has a beta of 1.3 and represents 20 percent of the portfolio.Asset 3 has a beta of 1.1 and is 25 percent of the portfolio.Asset 4 has a beta of 2.16.What is the portfolio beta?


Definitions:

Cost-to-Retail Ratio

A method used in retail to calculate the cost of goods sold based on the ratio of the cost of goods available for sale to the retail price of the goods.

Retail Inventory Method

An accounting method used by retailers to estimate inventory levels by incorporating the cost to retail price ratio.

Sales Discounts

Reductions in the price of goods or services offered to customers, typically as an incentive to encourage prompt payment.

Ending Inventory

The total value of goods available for sale at the end of an accounting period.

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