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You are managing a portfolio of 10 stocks which are held in equal dollar amounts. The current beta of the portfolio is 1.55, and the
You are managing a portfolio of 10 stocks which are held in equal dollar amounts. The current beta of the portfolio is 1.55, and the beta of stock a is 2.0. If stock A is sold and the proceeds are used to purchase a replacement stock, what does the beta of the replacement stick have to be to change the portfolio beta to 1.7?
A. 4.4
B. 5.3
C. 3.2
D. 3.5
E. 4.1
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