Question
Lucas builds a portfolio by investing in two stocks only: Samsung (SMSN) and Nokia(NOK). According to the CAPM, the expected risk premium (i.e., the expected
Lucas builds a portfolio by investing in two stocks only: Samsung (SMSN) and Nokia(NOK). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of SMSNis 8.98% and the expected risk premium of NOKis 6.51%. The beta of SMSNis equal to 1.07. If Lucas puts 62% of his money in SMSN stock and 38% in NOKstock, what is the approximate beta of his portfolio?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter
8th Canadian Edition
007133887X, 978-0071338875
