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Assume that CAPM holds and that both Apple and Yahoo plot on the SML. Apple has a beta of 2.6 and Yahoo has a beta

Assume that CAPM holds and that both Apple and Yahoo plot on the SML. Apple has a beta of 2.6 and Yahoo has a beta of 0.9. The expected return on the market portfolio is 9.25% and the risk-free rate is 1.0%.

Suppose that you wish to hold a portfolio consisting of only Apple and Yahoo and have your portfolio beta equal to 1.2

What proportion of your portfolio must be in Apple?

What proportion of your portfolio must be in Yahoo?

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