You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. The portfolio beta is equal to 1.12. You have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.50). What is the new beta of the portfolio?

Select the correct answer.

a. 1.1870b. 1.1890c. 1.1950d. 1.1930e. 1.1910