Suppose you held a diversified portfolio totaling $200,000. The portfolio consists of a $25,000 investment in each of 8 different common stocks. The portfolio's beta is 1.10. The portfolio beta is higher than you would lilke, so you have decided to sell 1 stock (Stock A) in your portfolio. Stock A has a beta of 1.20. As a replacement, you will use the $25,000 you obtained from selling Stock A to purchase Stock B, which has a beta of 0.80. What is your portfolio's new beta after you have replaced Stock A with Stock B? Carry out your answer to 4 decimal places. 1. 0.8250 2. 0.8750 3. 0.9500 4. 1.0000 5. 1.0500