Looking at a list of beta coefficients you spot a number of stocks as possible buys for your new stock portfolio. You have $80,000 to invest. You have decided to have just three stocks in your portfolio (this will make it easier to follow than a portfolio of more stocks). You have selected two already: GE with a beta of 1.40 and Bank of America with a beta of 1.78. You have invested $20,000 in each. For the final selection you are looking at Ford with a beta of 1.56, JP Morgan Chase with a beta of 1.64, Intel with a beta of 0.99 and PepsiCo with a beta of 0.35. You would like the overall beta of your portfolio to be as close to "the market" or "average stock" as possible.
Make your third selection and calculate the beta of your three-stock portfolio
(Include formula)