Let's solve the problem step by step: **Step 1: List the information** - Security A: Amount Invested = $4,900, Beta = 1.62 - Security B: Amount Invested = $5,900, Beta = 1.73 - Security C: Amount Invested = $8,400, Beta = 1.00 **Step 2: Calculate the total amount invested** \[ \text{Total Amount Invested} = \$4,900 + \$5,900 + \$8,400 = \$19,200 \] **Step 3: Find the portfolio weight of each security** - Weight of A: \( \frac{4,900}{19,200} = 0.2552 \) - Weight of B: \( \frac{5,900}{19,200} = 0.3073 \) - Weight of C: \( \frac{8,400}{19,200} = 0.4375 \) **Step 4: Calculate the portfolio beta** \[ \text{Portfolio Beta} = (w_A \times \beta_A) + (w_B \times \beta_B) + (w_C \times \beta_C) \] \[ = (0.2552 \times 1.62) + (0.3073 \times 1.73) + (0.4375 \times 1.00) \] Calculate each term: - \(0.2552 \times 1.62 = 0.4134\) - \(0.3073 \times 1.73 = 0.5316\) - \(0.4375 \times 1.00 = 0.4375\) Add them up: \[ 0.4134 + 0.5316 + 0.4375 = 1.3825 \] **Step 5: Final answer** \[ \boxed{1.38} \] **Explanation:** The beta of the portfolio is the weighted average of the individual asset betas, where the weights are the proportion of the total investment in each asset. So the portfolio beta is **1.38** (rounded to two decimal places).