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Problem 13-18 Reward-to-Risk Ratios (L04] Stock Y has a beta of 1 and an expected return of 12.4 percent. Stock Z has a beta of
Problem 13-18 Reward-to-Risk Ratios (L04] Stock Y has a beta of 1 and an expected return of 12.4 percent. Stock Z has a beta of .6 and an expected return of 8.2 percent. If the risk-free rate is 5.2 percent and the market risk premium is 6.4 percent, the reward-to-risk ratios for Stocks Y and Z are and percent, respectively. Since the SML reward-to-risk is percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
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