Over the past several weeks you have assembled a small stock portfolio via the purchase of small amounts of different company stocks. You know that the point of a portfolio is to reduce your overall exposure to systematic risk, but aren’t sure exactly what the risk of your new portfolio is. You have purchased the following : $10,000 of Ford Stock, $9,000 of John Deer Stock, and $8,000 of Health Care of America (HCA) Stock. You have estimated the betas of these stocks to be the following : a of 4.26 for Ford, a of 2.01 for John Deere, and a of 1.0 for HCA. What is the beta of your portfolio?
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