An investor holds a diversified portfolio with a beta equal to 1.5, consisting of a P100 investment in each of 10 different common stocks. He sold one of your stocks that has a beta equal to 0.5 for P100. The whole proceeds were used to purchase another stock that has a beta equal to 1. Determine the beta of the new portfolio?

An investor holds a diversified portfolio with a beta equal to 1.5, consisting of a P100 investment in each of 10 different common stocks. He sold one of your stocks that has a beta equal to 0.5 for P100. The whole proceeds were used to purchase another stock that has a beta equal to 1. Determine the beta of the new portfolio?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 11P

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