Abrams builds a portfolio by investing in two stocks only: Microsoft (MSFT) and Nokia (NOK)....
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Abrams builds a portfolio by investing in two stocks only: Microsoft (MSFT) and Nokia (NOK). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of MSFT is 13.87% and the expected risk premium of NOK is 5.2%. The beta of MSFT is equal to 1.37. If Abrams puts 70% of his money in MSFT stock and 30% in NOK stock, what is the approximate beta of his portfolio
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