The average beta of the newly added stocks. Introduction: Portfolio beta: The portfolio beta is a measure of the portfolio’s volatility. It measures how the portfolio moves with the movement in the market. A high portfolio beta shows that securities are more volatile in the price movements while a low beta represents that securities are less volatile in the price movements.

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Chapter 8, Problem 17P

Summary Introduction

To determine: The average beta of the newly added stocks.

Introduction:

Portfolio beta:

The portfolio beta is a measure of the portfolio’s volatility. It measures how the portfolio moves with the movement in the market. A high portfolio beta shows that securities are more volatile in the price movements while a low beta represents that securities are less volatile in the price movements.

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