Suppose you hold a diversified portfolio consisting of $10,000 invested equally in each of 10 different common stocks. The portfolio's beta is 1.12. Now suppose that you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.95. What would the portfolio's new beta be?© BrainMass Inc. brainmass.com June 3, 2020, 10:40 pm ad1c9bdddf
since the portfolio is invested equally, your sum total of betas for ...
This solution calculates the new beta of a portfolio.