A mutual fund manager has a $20,000 portfolio with a beta of 1. The risk-free rate is 4.5 percent and the market risk premium is 5.5 percent.

A mutual fund manager has a $20,000 portfolio with a beta of 1.5. The risk-free rate is 4.5 percent and the market risk premium is 5.5 percent. The manager expects to receive an additional $5,000,000, which he/she plans to invest in a number of stocks. After investing the additional funds, he/she wants the fund’s required return to be 13 percent. What should be the average beta of the new stocks added to the portfolio?