Thus the beta portfolio comes out to be 1.231.
The data from the question is summarized below
Q R S T
Beta : 0.85 0.91 1.31 1.76
Portfolio: 15% 25% 40% 20%
Portfolio beta is calculated by finding the weighted average of the betas of al the stocks weighted by their relative percentages in the portfolio. The equation is as below
[tex]\beta_{portfolio}=\sum w_{i} \beta_{i}[/tex]
The weight of the stock in portfolio (percentage of portfolio the stock forms)
[tex]\beta_{i}[/tex] is the beta of the stock
substituting the values for our stock in the equation
[tex]\beta_{portfolio}=\beta_{Q}w_{Q}+\beta_{R}w_{R}+\beta_{S}w_{S}+\beta_{T}w_{T}[/tex]
[tex]\beta_{portfolio}=0.85 \times 15\%+0.91 \times 25\%+1.31 \times 40\%+1.76 \times 20\%[/tex]
[tex]\beta_{portfolio}[/tex]=1.231
Thus the beta portfolio comes out to be 1.231
Learn more about portfolio, refer:
brainly.com/question/17165367
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