Question
Stock Y has a beta of 1.4 and an expected return of 14.2 percent. Stock Z has a beta of 0.85 and an expected return
Stock Y has a beta of 1.4 and an expected return of 14.2 percent. Stock Z has a beta of 0.85 and an expected return of 10.7 percent.
| Required: |
| What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
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The Evolution Of Finance
Authors: Barbara Guth
1st Edition
1633377261, 978-1633377264
