Jill Angel holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.875.
|
Stock
|
Investment
|
Beta
|
|
A
|
$ 50,000
|
0.50
|
|
B
|
50,000
|
0.80
|
|
C
|
50,000
|
1.00
|
|
D
|
50,000
|
1.20
|
|
Total
|
$200,000
|
|
If Jill replaces Stock A with another stock, E, which has a beta of 1.50, what will the portfolio's new beta be?