You hold a diversified portfolio consisting of a $5,000 investment in each of 20 different common stocks. The portfolio beta is equal to 1.05. You have decided to sell a gold mining stock (b = 1.25) at $5,000 net and use the proceeds to buy a like amount of a coal company stock (b = 1.90). What is the new beta of the portfolio?

a. 1.09

b. 1.24

c. 1.16

d. 1.03

e. 1.29