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Uut Yuusu a U Testra's excess return today? Question 15: Suppose News Corporation shares have a beta of 1.57, whereas CBA shares have a beta

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Uut Yuusu a U Testra's excess return today? Question 15: Suppose News Corporation shares have a beta of 1.57, whereas CBA shares have a beta of 0.87. If the risk-free interest rate is 6.1% and the expected return of the market portfolio is 11.2%, according to the CAPM, a. what is the expected return of News Corp shares? b. what is the expected return of CBA shares? c. what is the beta of a portfolio that consists of 65% News Corp shares and 35% CBA shares? d. what is the expected return of a portfolio that consists of 65% News Corp shares and 35% CBA shares? Question 16: You are analysing a share which has a beta of 1.37. The risk-free rate is 4.8% and you estimate the market risk premium to be 7.2%. If you expect the share to have a return of 10.8% over the next year, should you buy it? Why or why not? The expected return according to the CAPM is (Round to two decimal places

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