Did you know that iMovie has advanced features? Yep, it's true. Go to the iMovie menu and then to Preferences.
At this point you need to tick the box next to Turn on Advanced Features. Now you have access to blue screen, green screen, split screen, inset screen and more!
Now when you place a video clip on top of a video clip in your story board, you will have a new menu like the one in the photo below.