Answer:
1.19
Explanation:
The beta of a portfolio can be simply determined by a weighted average of each individual investment's beta. Thus, the portfolio beta after selling $10,000 of a stock with beta equal to 1.4 is:
[tex]B_1 = \frac{150,000*1.2-10,000*1.4}{140,000}\\B_1 =1.185714[/tex]
The beta of a new portfolio after purchasing $10,000 worth of a new stock with beta equal to 1.3 is:
[tex]B_2 =\frac{1.185714*140,000+1.3*10,000}{150,000}\\B_2=1.1933[/tex]
The beta of the new portfolio is 1.19.