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Suppose you hold a diversified portfolio worth $500,000 with 20 stocks. The beta of the portfolio is 1.4. Now you sold stock A worth $50,000
Suppose you hold a diversified portfolio worth $500,000 with 20 stocks. The beta of the portfolio is 1.4. Now you sold stock A worth $50,000 whose beta is 1.8. You want to buy a stock whose beta is 0.8. How much do you have to buy to make your portfolios beta be 1.2?
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