You hold a diversified portfolio consisting of a $$5,000$ investment in each of $40$

different common stocks. The portfolio beta is equal to $0\mathrm{.}9.$ You have decided to sell

one of your stocks which has a beta equal to $1\mathrm{.}1$ for $$5,000.$ You plan to use the

proceeds to purchase another stock which has a beta equal to $0\mathrm{.}6.$ What will be the

beta of the new portfolio? Show your answer to $2$ decimal places.

Your Answer:

Answer