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New portfolio beta after selling

Problem: Nicole holds three stocks in her portfolio: A, B, and C. The portfolio beta is 1.40. Stock A comprises 15% of the dollar value of her holdings and has a beta of 1.0. If Nicole sells all of her investment in A and invests the proceeds in the risk-free asset, her new portfolio beta will be:

a. 0.60
b. 0.88
c. 1.00
d. 1.25

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Accounting Basics: New portfolio beta after selling

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