Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 05, 2024

Spielberg 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

Spielberg 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 12.3% and the expected risk premium of SHE is 5.24%. The beta of MSFT is equal to 1.13. If Spielberg puts 63% of his money in MSFT stock and 37% in SHE stock, what is the approximate beta of his portfolio?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance Investment And Advisory Applications

Corporate Finance Investment And Advisory Applications

Authors: Jesse McDougall, Patrick Boyle

1st Edition

1530116597, 9781530116591

More Books

Students also viewed these Finance questions

Question

★★★★★

Calculate the total pressure (in atm) of a mixture of 0.0300 mol of helium, He, and 0.0200 mol of oxygen, O2, in a 4.00-L flask at 20C. Assume ideal gas behavior.

Answered: 1 week ago

Question

★★★★★

can someone please explain this to me? Consider the pairs {54321,50) and [1739,29341). _ For each pair ((1,3)) in the question, use the extended Euclidean algorithm to nd integers a: and 3; such that...

Answered: 1 week ago

Question

★★★★★

1. As you can see, all the client requirements have been met.

Answered: 1 week ago

Question

★★★★★

Prepare general journal entries for the following transactions of Sustain Company. Use the following (partial) chart of accounts: Cash; Prepaid Insurance; Accounts Receivable; Furniture; Accounts...

Answered: 1 week ago

Question

★★★★★

Spielberg 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)...

Answered: 1 week ago

Question

★★★★★

5. What is the magnitude of field strength (B) in Gauss? Now move the meter the same distance away from the South end of your magnet

Answered: 1 week ago

Question

★★★★★

Denign References Mailings Review View Help Tell me what you want to de SEP 26 You are considering the following two projects and can only take one. Your cost of capital is 11%. 0 A $100 B -$100 1 2...

Answered: 1 week ago

Question

★★★★★

Equivalent Units and Product Cost ReportWeighted Average Method In its first month's operations (January 2016,, Allred Company's Department 1 incurred charges of $2,160,000 for direct materials...

Answered: 1 week ago

Question

★★★★★

PA2-1 (Algo) Recording Manufacturing and Nonmanufacturing Costs, Preparing the Cost of Goods Manufactured Report and Income Statement [LO 2-3, 2-4, 2-5, 2-6] Lamonds Corp. uses a job order cost...

Answered: 1 week ago

Question

★★★★★

Lathrop Inc. purchased equipment on January 1 of Year 1 for $150,000 cash plus a note payable. The fair value of the equipment on January 1 of Year 1 is $542.666. The company uses the effective...

Answered: 1 week ago

Question

★★★★★

C Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $ 1 7 0 million on equipment with an assumed life of 5 years and an assumed salvage value of $ 2 0 million...

Answered: 1 week ago

Previous Question Next Question