Question
Stock X has a 9.0% expected return, a beta coefficient of 0.7, and a 40% standard deviation of expected returns. Stock Y has a 12.0%
Stock X has a 9.0% expected return, a beta coefficient of 0.7, and a 40% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 20% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%.
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Calculate each stock's coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal places.
CVx= ___
CVy= ____
b. Calculate each stock's required rate of return. Round your answers to one decimal place
rx=
ry=
c. Calculate the required return of a portfolio that has $6,000 invested in Stock X and $2,000 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places.
rp=
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