What will be the new portfolio beta


Dave has a $4 million portfolio, which consists of $200,000 in 20 different stocks. The portfolio beta is 1.5.Dave considers buying a stock for $100,000 . He will fund this by selling another stock in his portfolio.The stock that he would sell has a beta of 1.8.What will be the new portfolio beta, if Dave does this transaction?

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Accounting Basics: What will be the new portfolio beta
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