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Under the following conditions, what are the expected returns for stocks X and Y? l 0 = 0.05 b x,1 = 0.90 k 1 =

Under the following conditions, what are the expected returns for stocks X and Y?

l0 = 0.05

bx,1 = 0.90

k1 = 0.03

bx,2 = 1.60

k2 = 0.04

by,1 = 1.50

by,2 = 0.85

a.

14.1 percent and 12.9 percent

b.

12.5 percent and 19.5 percent

c.

19.5 percent and 18.5 percent

d.

21.2 percent and 18.5 percent

e.

11.5 percent and 15.5 percent

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