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9 Historical Returns: Expected and required Rates of Return You have observed the following returns over time: Year Stock x Stock Y Market . 2012
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Historical Returns: Expected and required Rates of Return You have observed the following returns over time: Year Stock x Stock Y Market . 2012 13% 13% 11% 2013 20 7 12 . 2014 -13 -3 -13 2015 3 1 3 24 11 13 2016 Assume that the risk-free rate is 6% and the market risk premium is 6%. Do not round Intermediate calculations. a. What is the beta of Stock X? Round your answer to two decimal places. b. What is the beta of Stock Y? Round your answer to two decimal places. c. What is the required rate of return on Stock X? Round your answer to one decimal place. d. What is the required rate of retum on Stock Y? Round your answer to one decimal place. e. What is the required rate or return on a portfolio consisting of 80% of Stock X and 20% of Stock Y7 Round your answer to one decimal place Step by Step Solution
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