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What will be new portfolio beta

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Reference no: EM132797421

Problem 1: Ms. Angela Martin holds two stocks in her Portfolio: A and B. The portfolio beta is 1.40. Stock-A comprises 15 percent of the dollar value of her holdings (i.e., Portfolio weight for Stock-A is 15%) and has a beta of 1.20. Angela's co-worker Dwight Schrute, who is a shrewd investor, advised Angela to sell all of her investment in Stock-A and hold the money in Cash. (i.e., sell Stock A, and keep the money received from the sale as Cash). If Angela follows Dwight's advice, what will be her new portfolio beta?

Reference no: EM132797421

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