1)The CFO of MediSearch plc believes that investing into a project which will develop a new drug for fighting the flu virus, promises a long-term annual return of 13%. The expected return of the market index is RM = 8.2%, the volatility of the market index is M = 9.8%, and the risk-free asset earns Rf = 5.7%. The CFO has studied similar projects of other companies and believes that the covariance between the returns of this project and the returns of the market is P,M = 0.0076 (in decimal form). What is the beta of the project?

2)Lucas builds a portfolio by investing in two stocks only: Microsoft (MSFT) and Huawei (SHE). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of MSFT is 9.25% and the expected risk premium of SHE is 6.34%. The beta of MSFT is equal to 1.23. If Lucas puts 75% of his money in MSFT stock and 25% in SHE stock, what is the approximate beta of his portfolio?