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Problem on a diversified portfolio

Problem:

Suppose you hold a diversified portfolio consisting of $10,000 invested equally in each of 10 different common stocks. The portfolio's beta is 1.12. Now suppose that 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 1.95. What would the portfolio's new beta be?

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Finance Basics: Problem on a diversified portfolio

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