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Suppose you hold a diversified portfolio consisting of a $10,000 invested equally in each of 10 different common stocks. The portfolios beta is 1.120. Now
Suppose you hold a diversified portfolio consisting of a $10,000 invested equally in each of 10 different common stocks. The portfolios beta is 1.120. Now suppose you decided to sell two stocks with betas of 0.950 and 1.100, respectively and buy one stock with a beta of 1.750. What would the portfolios new beta be?
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