Year Stock X Stock Y Market 2009 14% 13% 12% 2010 19% 7% 10% 2011 -16% -5% -12% 2012 3% 1% 1% 2013 20% 11% 15%

Assume the risk free rate is 6% and the market premium is 5%

a. ) What are the betas of Stocks X and Y?

b.) What are the required rates of return on Stocks X and Y?

c.) What is the required rate of return on a portfolio consisting of 80% of stock X and 20% of stock Y