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Stock Y has a beta of 1 . 2 and an expected return of 1 3 . 7 percent. Stock Z has a beta of
Stock Y has a beta of and an expected return of percent. Stock Z has a beta of and an expected return
of percent. If the riskfree rate is percent and the market risk premium is percent, the rewardtorisk
ratios for stocks Y and Z are and
percent, respectively. Since the SML rewardtorisk is percent, Stock Y is
and Stock Z is Do not round intermediate calculations
and enter your answers as a percent rounded to decimal places, eg
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