Historical Returns: Expected and Required Rates of Return

You have observed the following returns over time:

Year	Stock X	Stock Y	Market
2014	16	%	15	%	14	%
2015	17		6		11
2016	-13		-8		-13
2017	3		1		1
2018	23		8		13

Assume that the risk-free rate is 4% and the market risk premium is 3%.

What are the betas of Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places.

Stock X:

Stock Y:

What are the required rates of return on Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places.

Stock X: %

Stock Y: %

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 two decimal places.

%