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To calculate the beta of the portfolio, we use the weighted average formula for beta:

\[
\beta_{\text{portfolio}} = (w_1 \cdot \beta_1) + (w_2 \cdot \beta_2) + (w_3 \cdot \beta_3) + (w_4 \cdot \beta_4)
\]

Where:
- \(w_1, w_2, w_3, w_4\) are the weights (proportions) of the stocks in the portfolio.
- \(\beta_1, \beta_2, \beta_3, \beta_4\) are the betas of the respective stocks.

Given:
- Walmart (\(\beta_1 = 0.8\)) with \(w_1 = 10\% = 0.10\),
- Disney (\(\beta_2 = 1.13\)) with \(w_2 = 30\% = 0.30\),
- Oracle (\(\beta_3 = 1.53\)) with \(w_3 = 20\% = 0.20\),
- NBC (\(\beta_4 = 0.52\)) with \(w_4 = 40\% = 0.40\).

Now, substituting into the formula:

\[
\beta_{\text{portfolio}} = (0.10 \cdot 0.8) + (0.30 \cdot 1.13) + (0.20 \cdot 1.53) + (0.40 \cdot 0.52)
\]
\[
\beta_{\text{portfolio}} = 0.08 + 0.339 + 0.306 + 0.208
\]
\[
\beta_{\text{portfolio}} = 0.933
\]

So, the beta of the portfolio is **0.93** (to two decimal places).

Would you like a detailed explanation of how portfolio beta affects risk? Here are a few follow-up questions to consider:

1. What does a beta value of less than 1 imply about the portfolio's risk compared to the market?
2. How would the portfolio beta change if the allocation to Oracle (a higher beta stock) increased?
3. Why is the beta of a portfolio important for investors?
4. How do individual stock betas affect the overall volatility of a portfolio?
5. What are the limitations of using beta to assess portfolio risk?

**Tip:** A portfolio with a beta close to 1 will likely move in line with the market, while a beta greater than 1 implies higher volatility.

You have 4 stocks in your portfolio. Walmart has a beta of 0.8, Disney has a beta of 1.13, Oracle has a beta of 1.53 and NBC has a beta of 0.52. If you have 10% of your portfolio with Walmart, 30% in Disney, 20% with Oracle and 40% in NBC, what is the beta of your portfolio?

Learn how to calculate the beta of a portfolio using the weighted average method. This problem involves a portfolio with stocks like Walmart, Disney, Oracle, and NBC. Suitable for students studying portfolio management or finance.

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