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You have a $1 million portfolio consisting of a $200,000 investment in each of 5 different...

You have a $1 million portfolio consisting of a $200,000 investment in each of 5 different stocks. The portfolio has a beta of 2.0. If you add one more stock with an investment of $400,000 and a beta of 0.5. What will the portfolio's new beta be after this transaction?

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Answer #1

Answer is 1.57 beta

AbE3HByYfxhUAAAAAElFTkSuQmCC

1000000/1400000=71.43%

$400000/14000000=28.57%

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