Question
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 40% standard deviation of expected returns. Stock Y has a 12.5%
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. The data has been collected in the Microsoft Excel Online file below.
Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations.
CVx =
CVy =
Calculate each stock's required rate of return. Round your answers to two decimal places.
rx = %
ry = %
Calculate the required return of a portfolio that has $7,000 invested in Stock X and $8,500 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places
. rp = %
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