Jenna Holds a Diversified $100,000 Portfolio Consisting of 20 Stocks

question 117

Multiple Choice

Jenna holds a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each.The portfolio's beta is 1.12.Jenna plans to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.80.What will the portfolio's new beta be?

• A) 1.286
• B) 1.255
• C) 1.224
• D) 1.194
• E) 1.165

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