Suppose you held a diversified portfolio totaling $200,000. The portfolio consists of a $25,000 investment in each of 8

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Suppose You Held A Diversified Portfolio Totaling 200 000 The Portfolio Consists Of A 25 000 Investment In Each Of 8 1 (70.53 KiB) Viewed 105 times

Suppose you held a diversified portfolio totaling $200,000. The portfolio consists of a $25,000 investment in each of 8 different common stocks. The portfolio's beta is 1.10. The portfolio beta is higher than you would lilke, so you have decided to sell 1 stock (Stock A) in your portfolio. Stock A has a beta of 1.20. As a replacement, you will use the $25,000 you obtained from selling Stock A to purchase Stock B, which has a beta of 0.80. What is your portfolio's new beta after you have replaced Stock A with Stock B? Carry out your answer to 4 decimal places. 1. 0.8250 2. 0.8750 3. 0.9500 4. 1.0000 5. 1.0500