Microsoft according to the capital asset pricing


Suppose Pepsi Co. has a beta of 0.7, whereas the beta of Microsoft is 1.1. The risk-free interest rate is 3% and the market risk premium is 6%. What is the expected return of an equally weighted portfolio of Pepsi Co. and Microsoft according to the Capital Asset Pricing Model (CAPM)?

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Financial Management: Microsoft according to the capital asset pricing
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