# Question: Suppose that you hold a diversified portfolio consisting of 20

Suppose that you hold a diversified portfolio consisting of 20 different stocks, with $7,500 invested in each of the stocks. The portfolio beta is equal to 1.12. You have decided to sell one of the stocks in your portfolio with a beta equal to 1.0 for $7,500 and to use the proceeds to buy another stock for your portfolio. Assume that the new stock’s beta is equal to 1.75. Calculate your portfolio’s new beta.

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