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You hold a diversified portfolio consisting of a $10,000 investment in each of 20 different common stocks (i.e.. your total investment is $200,000). The portfolio
You hold a diversified portfolio consisting of a $10,000 investment in each of 20 different common stocks (i.e.. your total investment is $200,000). The portfolio beta is equal to 1.2. You have decided to sell one of your stocks which has a beta equal to 0.7 for $10,000. You plan to use the proceeds to purchase another stock which has a beta equal to 1.4. What will be the beta of the new portfolio? 1.235 1.235 1.333 1.165 1.250
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