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You hold four stocks in your portfolio: stock A, stock B, stock C, and stock D. The portfolio beta ( p ) is 1.20. Stock

You hold four stocks in your portfolio: stock A, stock B, stock C, and stock D. The portfolio beta ( p) is 1.20. Stock C constitutes 40 percent of the dollar value of your holdings and has a beta of 1.60. If you sell all of your holdings in stock C, and replace them with an equal investment in stock E (which has a beta of 1.25), what will your new portfolio beta will be?

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