Statistics Help
Question: Dr. Zweibel's portfolio consists of four stocks: AZMN 35%, beta 2.4; MKR 20%, beta 1.6; ABDE, 25%, beta 1.8; and SBUK, 20%, beta 2.1. Compute Dr. Z's portfolio beta. Does he seem to be a conservative or aggressive investor? Edit
Answer: Portfolio Beta = Weights of individual stocks*beta of individual stock
= 35%*2.4+20%*1.6+25%*1.8+20%*2.1
= 2.03
The investor seems to be an aggressive investor as the beta of the portfolio is more than 1, indicating that the investor is wiling ti take risk.
Edit
TutorTeddy.com & Boston Predictive Analytics
[ Email your Statistics or Math problems to help@teddycan.com (camera phone photos are OK) ]
Boston Office (Near MIT/Kendall 'T'):
Cambridge Innovation Center,
One Broadway, 14th Floor,
Cambridge, MA 02142,
Phone: 617-395-8864
Dallas Office (Near Galleria):
15950 Dallas Parkway,
Suite 400,
Dallas, TX 75248,
Phone: 866-930-6363