1. Sherlock has a diversified portfolio consisting of 10 different common stocks that are equally weighted. The portfolio is valued at $500 with beta equal to 1.5. Since he feels that one of the stock will face a price drop in the near future, he quickly sells that particular stock for $100. The sold stock has a beta of 0.9. Using all of the selling proceeds, Sherlock then purchases another stock that has a beta of 0.5. What is his new portfolio beta now?