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What is the new beta of the rebalanced portfolio

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Reference no: EM132682006

You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. The portfolio beta is equal to 1.12. You have decided to sell a coal mining stock (beta = 1.00) at $5,000 net, and use the proceeds to buy a like amount of a mineral rights company stock (beta = 2.00). What is the new beta of the rebalanced portfolio?

Reference no: EM132682006

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