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You own $10,000 of Olympic Steel stock that has a beta of 2.2. You also own...

You own $10,000 of Olympic Steel stock that has a beta of 2.2. You also own $7,000 of Rent-a-Center (beta = 1.5) and $8,000 of Lincoln Educational (beta = 0.5).

What is the beta of your portfolio?

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Answer #1

Ans 1.46

Stock BETA Investment BETA * Investment
Olympic Steel 2.20 10000.00 22000.00
Rent-a-Center 1.50 7000.00 10500.00
Lincoln Educational 0.50 8000.00 4000.00
Total 25000.00 36500.00
Average Beta = (Beta* investment) / Total Investment
36500 / 25000
1.46
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