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Use the historical returns for Stocks X, Y and the market to answer the following questions. Historical Returns: Year 2016 2017 2018 2019 2020 Stock
Use the historical returns for Stocks X, Y and the market to answer the following questions. Historical Returns: Year 2016 2017 2018 2019 2020 Stock X 12.00 15.00 -13.00 5.00 22.00 Stock Y 14.00 7.00 -3.00 4.00 10.00 Market 13.00 -13.00 11.00 3.00 12.00 a. Find the average rate of return for each during the 5 year period. b. Calculate the standard deviation for each c. Find the Beta for each stock d. Using your betas and the following information find the required rate of return on ths stocks Risk-free rate, IRF 4.00% Market risk premium, RPM 5.00% (Market risk-Risk Free rate) e. Your portfolio consists of: % of Stock X in Portfolio 80% % of Stock Y in Portfolio 20% Find the portfolio beta
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