Suppose that you hold a diversified portfolio consisting of 20 different stocks, with $7,500 invested in each

Question:

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.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...