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I keep getting stuck. Please help! Assume the risk-free rate is 4.1% and expected market return is 10.2%. Suppose that you have observed the following

I keep getting stuck. Please help!

Assume the risk-free rate is 4.1% and expected market return is 10.2%. Suppose that you have observed the following returns over time:

Year Stock A Stock B Market

2012 5% 14% 12%

2013 7% 15% 10%

2014 -9% -17% -12%

2015 1.5% 3% 1%

2016 10% 18% 15%

2017 17.5% 24.5% 20%

  1. What are the betas of Stock A and Stock B?
  2. What are the required rate of returns of Stocks A and B?
  3. What is the required rate of return on a portfolio that consists of 60% of A and 40% of B?

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