You have a portfolio that consists of a $5,000 investment in each of 20 different stocks. The beta of the portfolio is equal to 1.12. You have decided to sell a coal mining stock (b = 1.00) for $5,000 net and use the proceeds to buy a similar number of shares of a mining rights company (b = 2.4). 

What is the new beta of the portfolio?

Answer rating: 100% (QA)

To calculate the new beta of the portfolio after selling the coal mining stock and buying shares of ... View the full answer