Stock X has a 10% expected return, a Beta coefficient of .9, and a 35% standard deviation
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Question:
Stock X has a 10% expected return, a Beta coefficient of .9, and a 35% standard deviation of expected return. Stock Y has a 12.5% expected return, a bet coefficient of 2, and a 25% standard deviation. The risk free rate is 2% and the market risk premium is 5%
- Calculate each stock’s coefficient of variation.
- Which stock is riskier?
- Calculate each stock’s required rate of return.
- Calculate the required rate of return of a portfolio that has $7,500 invested in Stock X and $2,500 invested in Stock Y.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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