Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer a,b, and c Excel One Structurel Activity storical Retum Expected and Required R You have observed the following returnere Year Mock X Stock

please answer a,b, and c
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Excel One Structurel Activity storical Retum Expected and Required R You have observed the following returnere Year Mock X Stock Y Market 2011 2013 SA 2013 -41 2014 2 2015 17 that the free rate is and the market prenum The date has been citected in the Moon Exo Ordine fs below. Open the spreached and p What is the of Black di calcinhard to deal pla (pla onerendka z ancladans. Kaset var einn H RPUNCT 12N 3 -S 1 ILS . -12 2 had me of han rest rate of share on a puertas coming of 90% of NEC PAX WING istorical Returns: Expected & Required Rates of Return Historical Retums: Year Stock X Stock Y 2011 2012 2013 2014 2015 Risk free rate, far Market risk premium, RP % of Stock X in Portfolio % of Stock Y in Portfolio Stock X Stock Y Beta b NIA Required rate of return, t #NIA Portfolio beta, b ONIA Required return on portfolio, r #N/A Alternate portfolio return calculation using individual stocks required returns Required return on portfolio, f #NJA 13.00% 18.00% -13.00% 2.00% 20.00% 3.00% 6.00% 80% 20% 12.00% 5.00% -5.00% 1.00% 8.00% Market 11.00% 8.00% -12.00% 2.00% 17.00% Formulas AN/A SNIA You have observed the following returns over time: Year Stock X Stock Y 2011 2012 2013 -5 -12 2014 2 1 2 2015 20 B 17 Assume that the risk-free rate is 3% 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. 13 % 18 12 % 5 Market 11 % 8 a. What is the beta of Stock X? Do not round intermediate calculations. Round your answer to two decimal places. What is the beta of Stock Y? Do not round intermediate calculations. Round your answer to two decimal places. b. What is the required rate of return on Stock X? Do not round intermediate calculations. Round your answer to one decimal place. What is the required rate of return on Stock Y? Do not round intermediate calculations. Round your answer to one decimal place. % c. 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investment Science

Authors: David G. Luenberger

1st International Edition

0195391063, 9780195391060

More Books

Students also viewed these Finance questions

Question

Describe organized labors strategies for a stronger movement.

Answered: 1 week ago

Question

Explain the nature and role of safety, health, and wellness.

Answered: 1 week ago

Question

Identify the steps that lead to forming a bargaining unit.

Answered: 1 week ago