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Lucas builds a portfolio by investing in two stocks only: Google (GOOG) and Motorola (MSI). According to the CAPM, the expected risk premium (i.e., the
Lucas builds a portfolio by investing in two stocks only: Google (GOOG) and Motorola (MSI). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of GOOG is 10.48% and the expected risk premium of MSI is 6.46%. The beta of GOOG is equal to 1.42. If Lucas puts 68% of his money in GOOG stock and 32% in MSI stock, what is the approximate beta of his portfolio? Bp = Number (Please round your answer with two decimals)
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