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Suppose you hold a diversified portfolio consisting of a $10,000 investment in each of 12 different common stocks. The portfolio's beta is 1.25. Now suppose
Suppose you hold a diversified portfolio consisting of a $10,000 investment in each of 12 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 0.50 and use the proceeds to buy a replacement stock with a beta of 2.00. The new beta of the portfolio be? Can not be determined from the information given Lower than 1.25 Remain unchanged Higher than 1.25
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