Historical Returns: Expected and Required Rates of Return You have observed the following returns over time:...
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Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Stock Y Year 2012 2013 2014 2015 Stock X 15% 20 -15 12% 2 6 -6 Market 12% 9 -13 1 2016 20 12 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. 3 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. % Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Stock Y Year 2012 2013 2014 2015 Stock X 15% 20 -15 12% 2 6 -6 Market 12% 9 -13 1 2016 20 12 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. 3 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. % Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Stock Y Year 2012 2013 2014 2015 Stock X 15% 20 -15 12% 2 6 -6 Market 12% 9 -13 1 2016 20 12 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. 3 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. % Historical Returns: Expected and Required Rates of Return You have observed the following returns over time: Stock Y Year 2012 2013 2014 2015 Stock X 15% 20 -15 12% 2 6 -6 Market 12% 9 -13 1 2016 20 12 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. 3 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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a What is the beta of Stock X To calculate the beta of Stock X we can use the following formula Beta ... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
Posted Date:
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