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Beta of the replacement stock

Question:

Imagine you are managing a portfolio of 10 stocks which are held in equal amounts. The current beta of the portfolio is 1.64, and the beta of Stock A us 2.0. If Stock A is sold, what does the beta of the replacement stock have to be to produce a new portfolio of 1.55?

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Finance Basics: Beta of the replacement stock

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Finance Basics: Beta of the replacement stock

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