Calculate the portfolio new beta


Problem:

Calculate the portfolio's new beta given the following information. Currently, you hold a fairly diversified portfolio of 50 stocks, each investment is $6,000. The portfolio's beta is 1.3. After hearing some troubling news concerning one of your securities, you decide to sell it, beta of 1, and buy another security with a beta 2.6 with same dollar amount.

Note: Please explain comprehensively and give step by step solution.

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Finance Basics: Calculate the portfolio new beta
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