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What is the approximate beta of portfolio of spielberg

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Reference no: EM132928058

Problem 1: Spielberg builds a portfolio by investing in two stocks only: Samsung (SMSN) and Motorola (MSI). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of SMSN is 11.25% and the expected risk premium of MSI is 5.58%. The beta of SMSN is equal to 1.2. If Spielberg puts 75% of his money in SMSN stock and 25% in MSI stock, what is the approximate beta of his portfolio?

Reference no: EM132928058

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