Answer:
The beta for the other stock is 1.68
Explanation:
[tex]\beta_{2}[/tex]: The beta of the second stock
The weighted beta of the portfolio is given by ∑[tex]x_{i} \beta _{i}[/tex] where x is the weight of the individual stock/asset, [tex]\beta_{i}[/tex] is the beta of the individual stock/asset
As your portfolio is as equally risky as the market it's beta should be 1
Risk-free asset has beta 0
=> ∑[tex]x_{i} \beta _{i}[/tex] = 1
=> (0.33 * 0) + (0.33 * 1.35) + 0.33 *[tex]beta _{2}[/tex] = 1
=> [tex]\beta_{2}[/tex] = 1.68
