Assignment:
You are going to invest $20,000 in a portfolio consisting of assets X, Y, Z as follows:
Asset Annual Return probability beta proportion
X 10% 0.50 1.2 0.333
Y 8% 0.25 1.6 0.333
Z 16% 0.25 2.0 0.333
The beta of the portfolio containing X Y Z is
A. 2.0
B. 2.4
C. 1.6
D. 1.5
The beta of this portfolio indicates:
A. has more risk then market
B. has same risk as market
C. has an undetermined amount of risk compared to market
D. has less risk than the market
Provide complete and step by step solution for the question and show calculations and use formulas.