Question: Question: Problem 8-14 Portfolio beta Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's

Question:

Problem 8-14 Portfolio beta

Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 2.04. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and to use these proceeds to buy another stock with a beta of 1.77. What would your portfolio's new beta be? Round your answer to two decimal places.

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