Weighted average of the betas of individual securities

Reference no: EM1344181

If we put a% of our wealth into asset X, with systematic risk of βx, and b% of our wealth into asset Y, with systematic risk of βy, then the beta of the resulting portfolio, βp, is simply the weighted average of the betas of individual securities.

how to Prove the equation. βP = a βx + b βy.

Reference no: EM1344181

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