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A Portfolio Comprises Coke (Beta of 1

question 4

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A portfolio comprises Coke (beta of 1.3) and Wal-Mart (beta of 0.7) . The amount invested in Coke is $20,000 and in Wal-Mart is $20,000. What is the beta of the portfolio?

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Definitions:

Occurrences

Incidents or instances of something happening.

Poisson Random Variable

A type of discrete random variable that expresses the probability of a given number of events occurring in a fixed interval of time or space if these events happen with a known constant mean rate and independently of the time since the last event.

Successes Achieved

The accomplishments or favorable outcomes attained in a given project, experiment, or other endeavors.

Random Sample

A subset of individuals chosen from a larger set, where each individual has an equal probability of being chosen, ensuring the sample’s representation of the entire population.

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