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You have observed the following returns over time: Year Stock X Stock Y Market 2012 13% 11% 13% 2013 21 7 11 2014 -17 -8

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You have observed the following returns over time: Year Stock X Stock Y Market 2012 13% 11% 13% 2013 21 7 11 2014 -17 -8 -10 2015 3 1 1 2016 19 8 17 Assume that the risk-free rate is 6% and the market risk premium is 7%. Do not round intermediate calculations. a. What is the beta of Stock X? Round your answer to two decimal places. b. What is the beta of Stock Y? Round your answer to two decimal places. C. What is the required rate of return on Stock X? Round your answer to one decimal place. % d. What is the required rate of return on Stock Y? Round your answer to one decimal place. % e. What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place. %

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