In this video, we explore how to calculate the beta of a portfolio using the Capital Asset Pricing Model (CAPM). We walk through a practical example where we calculate the portfolio beta of an investment involving cash, PepsiCo, and a well-diversified portfolio. By understanding the weighted average of individual betas, we break down the process and highlight key concepts such as the beta of cash (which is zero) and the beta of a diversified portfolio (which is one). This approach simplifies the often complex math involved in portfolio beta calculations.