You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%.a. What are the betas of Stocks X and Y?b. What are the required rates of...


You have observed the following returns over time:


Assume that the risk-free rate is 6% and the market risk premium is 5%.
a. What are the betas of Stocks X and Y?
b. What are the required rates of return on Stocks X and Y?
c. What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?


Year<br>Stock X<br>Stock Y<br>Market<br>2015<br>14%<br>13%<br>12%<br>2016<br>19<br>7<br>10<br>2017<br>-16<br>-5<br>-12<br>2018<br>3<br>1<br>1<br>2019<br>20<br>11<br>15<br>

Extracted text: Year Stock X Stock Y Market 2015 14% 13% 12% 2016 19 7 10 2017 -16 -5 -12 2018 3 1 1 2019 20 11 15

Jun 07, 2022
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