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Please You have observed the following returns over time: Stock Y 15% Year 2015 2016 2017 5 17 -17 3 -2 -10 2018 1 3
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You have observed the following returns over time: Stock Y 15% Year 2015 2016 2017 5 17 -17 3 -2 -10 2018 1 3 2019 18 12 17 Assume that the risk-free rate is 5% and the market risk premium is 3%. a. 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: b. 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: % 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 two decimal places. % Stock X 14% Market 11% 8Step by Step Solution
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