Question
Excel Online Structured Activity: Historical Return: Expected and Required Rates of Return You have observed the following returns over time: Year Stock X Stock Y
Excel Online Structured Activity: Historical Return: Expected and Required Rates of Return
You have observed the following returns over time:
Year | Stock X | Stock Y | Market | |||
2011 | 13 | % | 14 | % | 12 | % |
2012 | 18 | 5 | 10 | |||
2013 | -12 | -4 | -13 | |||
2014 | 3 | 2 | 2 | |||
2015 | 18 | 10 | 14 |
Assume that the risk-free rate is 4% and the market risk premium is 6%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
Open spreadsheet
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What is the beta of Stock X? Do not round intermediate calculations. Round your answer to two decimal places.
fill in the blank 2
What is the beta of Stock Y? Do not round intermediate calculations. Round your answer to two decimal places.
fill in the blank 3
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What is the required rate of return on Stock X? Do not round intermediate calculations. Round your answer to one decimal place.
fill in the blank 4 %
What is the required rate of return on Stock Y? Do not round intermediate calculations. Round your answer to one decimal place.
fill in the blank 5 %
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What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Do not round intermediate calculations. Round your answer to one decimal place.
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