Question
Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Year Stock X Stock Y Market 2012 16% 14%
Historical Returns: Expected and Required Rates of Return
You have observed the following returns over time:
| Year | Stock X | Stock Y | Market |
| 2012 | 16% | 14% | 12% |
| 2013 | 21 | 5 | 11 |
| 2014 | -17 | -2 | -10 |
| 2015 | 5 | 2 | 1 |
| 2016 | 23 | 13 | 16 |
Assume that the risk-free rate is 4% and the market risk premium is 6%. Do not round intermediate calculations.
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.
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.
What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Which Crypto Currency Should I Buy Make Finding And Investing In New Crypto Currencies Fun Easy And Profitable
Authors: Lisa Phillips
1st Edition
1732644586, 978-1732644588
