You have a $5 million portfolio consisting of a $250,000 investment in each of 20 different stocks. The portfolio has a beta of 1.2. You are considering selling $500,000 worth of one stock with a beta of 0.8 and using the proceeds to purchase another stock with a beta of 1.6. What will the portfolio’s new beta be after these transactions? Im stuck

You have a $5 million portfolio consisting of a $250,000 investment in each of 20 different stocks. The portfolio has a beta of 1.2. You are considering selling $500,000 worth of one stock with a beta of 0.8 and using the proceeds to purchase another stock with a beta of 1.6. What will the portfolio’s new beta be after these transactions? Im stuck

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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