Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 dif

Question

Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35. What would the portfolio's new beta be? a. 1.29 b. 1.17 c. 1.23 d. 1.36 e. 1.43 Hide FeedbackShow All Feedback Check My Work Feedback Post Submission Feedback Solution

Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35. What would the portfolio's new beta be? Hide FeedbackShow All Feedback Check My Work Feedback Post Submission Feedback Solution Hide FeedbackShow All Feedback Hide FeedbackShow All Feedback Check My Work Feedback Post Submission Feedback Solution Check My Work Feedback Post Submission Feedback Solution Check My Work Feedback Check My Work Feedback Check My Work Feedback Post Submission Feedback Post Submission Feedback Post Submission Feedback Solution Solution Solution

a. 1.29 b. 1.17 c. 1.23 d. 1.36 e. 1.43

Explanation / Answer

a. 1.29

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