Question
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 one of your stocks that has a beta of 1.000 and to use the proceeds to buy a replacement stock with a beta of 2.260. What would the portfolios new beta be?
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
12th Edition
1260772160, 978-1260772166
