Your Uncle has won lotteries and has decided to invest the funds in various Securities. His financial advisor advised him to invest 40% of the proceeds into Government Securities (Treasury Bills) and the balance invested in the Stock Market, with funds spread equally among the Securities listed on the market.
Required:
Advise your Uncle’s Portfolio risk (beta coefficient). (2 marks)
View Solution
Portfolio Risk (β)
Beta of (Treasuring Bills) = 0
Beta of Market = 1
Hence Portfolio = {40% x 0} x {60% x 1}
. = 0.6