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What will portfolio beta be if riskiest security is replaced

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Reference no: EM132959163

An investor who believes the economy is slowing down wishes to reduce the risk of her portfolio. She currently owns 12 securities, each with a market value of $3,000. The current beta of the portfolio is 1.21 and the beta of the riskiest security is 1.62.

Problem 1: What will the portfolio beta be if the riskiest security is replaced with a security of equal market value but a beta of 0.80?

Reference no: EM132959163

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