3.1 Show that for any portfolio w =equal to(wi,..., wn) the Beta of the portfolio isBw = wiB1 ++ wn Bn,!!...where B; for i = 1,...,n are Betas of individual assets.

Beta is a determination of the risk of an asset with respect to market risk. Here, the market risk…

Answered: 3.1 Show that for any portfolio w = =…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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3.1 Show that for any portfolio w = = (wi,, wn) the Beta of the portfolio is equal to Bw=w₁31 +...+ Wnßn, where 3, for i = 1,...,n are Betas of individual assets.