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You have a $2.5 million portfolio consisting of a $500,000 investment in each of 5 different stocks. the portfolio has a beta equal to 1.20.
You have a $2.5 million portfolio consisting of a $500,000 investment in each of 5 different stocks. the portfolio has a beta equal to 1.20. You are considering selling $500,000 worth of one stock which has a beta equal to 0.8 and using the proceeds to purchase another stock which has a beta equal to 1.6. What will be the new beta after this transaction?
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