Question
20. Stock Y has a beta of 1.12 and an expected return of 13.15 percent. Stock Z has a beta of 0.40 and an expected
20. Stock Y has a beta of 1.12 and an expected return of 13.15 percent. Stock Z has a beta of 0.40 and an expected return of 6 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
21.A stock has an expected return of 13.7 percent, a beta of 1.9, and the return on the market is 9.1 percent. What must the risk-free rate be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
22. You own 500 shares of Stock A at a price of $65 per share, 584 shares of Stock B at $74 per share, and 550 shares of Stock C at $34 per sharer. The betas for the stocks are 1.8, 1.2, and 0.6, respectively. What is the beta of your portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started