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What will happen to the beta of the new portfolio

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Reference no: EM133004273

Problem 1: You have a $2 million portfolio consisting of $100,000 investments in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling one stock for $100,000 with a beta of 0.9 and using the proceeds to buy another stock with a beta of 1.4. What will happen to the beta of the new portfolio after the transaction?

Reference no: EM133004273

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