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You have a $1.5 million portfolio consisting of a $100,000 investment in each of 15 different common stocks. The portfolios beta is 1.25. Now suppose
You have a $1.5 million portfolio consisting of a $100,000 investment in each of 15 different common stocks. The portfolios beta is 1.25. Now suppose you have decided to sell one of the stocks in your portfolio with a beta equal to 0.85 for $100,000 and to use these proceeds to buy another stock for your portfolio. Assume the new stocks beta is 1.24. Calculate your portfolios new beta.
- 1.2197
- 1.2497
- 1.276
- 1.1667
- None of the above.
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