Calculate the weight of apple in her portfolio

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Catherine invests 20% of her wealth in the risk free asset and the rest in Apple shares and Google shares. The risk premium on Apple shares is 10%, the risk premium on Google is 7% and the market risk premium is 8%. Catherine’s total portfolio of the three assets is 10% less risky than the market portfolio. Calculate the weight of Apple in her portfolio. Assume that the Capital Asset Pricing Model holds.

Reference no: EM132014422

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