Historical Returns: Expected and Required Rates of Return You have observed the following returns over time:

Year Stock X Stock Y Market

2011 12% 11% 13%

2012 18% 6% 12%

2013 -15% -7% -12%

2014 2% 2% 1%

2015 21% 13% 14%

risk-free rate is 4% 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. What is the beta of Stock Y? Round your answer to two decimal places.

B. What is the required rate of return on Stock X? Round your answer to one decimal place. What is the required rate of return on Stock Y? Round your answer to one decimal place.