You hold 13 stocks in your portfolio. Each stock has the same weight. The portfolio

beta is 1.26. If you sell one stock which has a beta of 1.20 and invest the proceeds in a

new stock which has a beta of 1.04. What will be your new portfolio beta?

(Please retain at least 4 decimal places in your calculations and at least 2 decimal

places in the final answer.)

The beta for the new portfolio will be