1. In an odd twist of fate, the return on the stock market has been exactly 1 percent in each of the last eight months. The return on Simon Entertainment stock in the past eight months has been as follows: 8%, 4%, 16%, -10%, 26%, 22%, 1%, -55%. From this information, estimate the beta of Simon stock.
2. Petro-Chem Inc. stock has a beta equal to 0.9. Digi-Media Corp.'s stock beta is 2.0. What is the beta of a portfolio invested equally in these two stocks?