PORTFOLIO BETA Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio’s beta is 1 12. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1 0 for $7,500 and use the proceeds to buy another stock with a beta of 1 75. What would your portfolio’s new beta be?

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PORTFOLIO BETA Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio’s beta is 1 12. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1 0 for $7,500 and use the proceeds to buy another stock with a beta of 1 75. What would your portfolio’s new beta be?

 

 

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