Suppose drug-maker Pfizer (PFE) has a beta of 0.7, whereas the beta of Google (GOOG) is 0.9.

Question:

Suppose drug-maker Pfizer (PFE) has a beta of 0.7, whereas the beta of Google (GOOG) is 0.9. If the risk-free interest rate is 3% and the market risk premium is 6%, what is the expected return of equally weighted portfolio of Pfizer and Google, according to the CAPM?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Corporate Finance

ISBN: 9780273792024

3rd Global Edition

Authors: Peter Demarzo, Jonathan Berk

Question Posted: