How to calculate the beta weight of stocks in a portfolio

In this video, we tackle a finance exam-style question focusing on portfolio beta and asset weights. Jake, a hypothetical investor, wants his portfolio's beta to equal 1.28. We break down the process of using the portfolio beta formula to determine the appropriate weights for each asset in his portfolio, including stocks like Pepsico, Apple, and Tesla, as well as a risk-free asset. The video guides you through how to calculate the necessary investment in Tesla to achieve this beta target, explaining key concepts like asset weights, betas, and how to handle the risk-free rate in such calculations.

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How to calculate returns per unit of Beta (β)

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How to calculate the beta (β) of individual stocks in a portfolio (Sarah example)