*Harry has chosen only two stocks to invest in his portfolio: Stock X and Stock Y. According to the CAPM, the risk premium of Stock X is 12.5% and risk premium of Stock Y is 6.5%. The beta of Stock X is 1.2. If Harry puts 45% of his money in Stock X and 45% in Stock Y. What is the beta of the portfolio.

*Harry has chosen only two stocks to invest in his portfolio: Stock X and Stock Y. According to the CAPM, the risk premium of Stock X is 12.5% and risk premium of Stock Y is 6.5%. The beta of Stock X is 1.2. If Harry puts 45% of his money in Stock X and 45% in Stock Y. What is the beta of the portfolio.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 15MC

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