Answer:
a. 1.17
Explanation:
For computing the portfolio beta, first we have to determine the weights of stock A and stock B which is shown below:
Stock A weightage = Invested amount ÷ total amount
= $37,500 ÷ $100,000
= $0.0375
Stock A weightage = Invested amount ÷ total amount
= $62,500 ÷ $100,000
= $0.0625
Now multiply the weighatge into its beta
= Stock A weightage × stock A beta + Stock B weightage × stock B beta
= 0.375 × 0.75 + 0.625 × 1.42
= 0.28125 + 0.8875
= 1.16875 or 1.17
