Question
Problem 13-19 Reward-to-Risk Ratios [LO4] Stock Y has a beta of 1.2 and an expected return of 14.5 percent. Stock Z has a beta of
Problem 13-19 Reward-to-Risk Ratios [LO4]
| Stock Y has a beta of 1.2 and an expected return of 14.5 percent. Stock Z has a beta of .7 and an expected return of 9.3 percent. |
| What would the risk-free rate have to be for the two stocks to be correctly priced? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Risk-free rate | % |
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The Commercial Aircraft Finance Handbook
Authors: Ronald Scheinberg
2nd Edition
1138558990, 978-1138558991
