In this video, the concept of beta in finance is explored, emphasizing its importance in portfolio management and investment analysis. The task is to compute Stock D’s beta, given a portfolio with multiple securities. The video walks through the problem by first outlining the provided data, including the required rate of return, risk-free rate, and market return. It then introduces the Security Market Line (SML) and the Capital Asset Pricing Model (CAPM) to help derive the missing beta. Key concepts like the portfolio beta, which is the weighted sum of individual security betas, are discussed. The video carefully explains the calculation steps, from identifying known values to applying the SML formula. The importance of security weights is highlighted, with step-by-step instructions for determining them based on the portfolio’s investment proportions. Finally, the solution to Stock D’s beta is reached, followed by a recap of the key takeaways, encouraging further practice and study of these crucial finance principles