Your retirement fund consists of $5,000 investment in each of 15 different common stocks. The portfolio’s beta is 1. Suppose you sell one of the…
Your retirement fund consists of $5,000 investment in each of 15 different common stocks. The portfolio’s beta is 1.20. Suppose you sell one of the stocks with a beta of .8 for $5,000 and use the proceeds to buy another stock whose beta is 1.6. Calculate your portfolio’s new beta.
