Question

You bought 200 shares of Dr Pepper Snapple Group at $70.67 per share, 100 shares of Home Depot at $111.72 per share, and 50 shares of Tesla Motors at $235.11 per share one year ago. Suppose that the financial data from the same period indicate that Dr Pepper Snapple Group, Inc. stock has a beta of -0.11, Home Depot, Inc. stock has a beta of 1.21, and Tesla Motors, Inc. stock has a beta of 1.4. The risk-free interest rate is 2% and the market risk premium is 6.7%. What is the beta of the portfolio?

A)1.9550
B)1.0935
C)0.7668
D)0.4828
E)0.8307

Answer 1

Explanation:

1.9550

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