Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have observed the following returns over time: Year Stock X Stock Y Market 2 0 1 4 1 5 % 1 5 % 1

You have observed the following returns over time:
Year Stock X Stock Y Market
201415%15%11%
20151788
2016-14-7-14
2017321
201819915
Assume that the risk-free rate is 6% and the market risk premium is 4%.
What are the betas of Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places.
Stock X:
Stock Y:
What are the required rates of return on Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places.
Stock X:
%
Stock Y:
%
What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Do not round intermediate calculations. Round your answer to two decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Healthcare Finance

Authors: Louis C. Gapenski

2nd Edition

1567934757, 978-1567934755

More Books

Students also viewed these Finance questions