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You have observed the following returns over time: year stock x stock y market 2009 14% 13% 12% 2010 19 7 10 2011 -16 -5
You have observed the following returns over time: 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 that the risk free rate is 6% and the market risk 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? I need the complete work with formulas.
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