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5.3 You expect the risk-free rate (RFR) to be 4 percent and the market return to be 10 percent. You also have the following information:

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5.3 You expect the risk-free rate (RFR) to be 4 percent and the market return to be 10 percent. You also have the following information: CURRENT ESTIMATED. ESTIMATED STOCK BETA 1.50 .50 PRICE S 20 S 42 $ 45 PRICE S21 0.50 S 45 S 53 DIVIDEND Z 2.00 $ 1.00 $ 2.00 a. (4 points) What are the expected (required) rates of return for the three stocks (in the order X, Y, Z)? b. (4 points) What are the estimated rates of return for the three stocks (in the order X, Y, Z)? c. (2 points) What is a reasonable investment strategy concerning the three stocks

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