You have $4,000,000 in a portfolio consisting of 8 stocks wi…
You have $4,000,000 in a portfolio consisting of 8 stocks with $500,000 invested in each. The portfolio’s beta is 1.80. You plan to sell Stock A in your portfolio and use the proceeds to buy Stock B. Stock A has a beta of 1.50, while Stock B’s beta is 0.60. After this transaction, what will be the portfolio’s new beta? (Hint: Make sure to carry out your calculation to 4 decimal places.)