You have observed the following returns over time Year Stock X Stock Y Market 2012 14 13 12 2013 19 7 10 2014 16 5 12 2015 3 1 1 2016 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 Stock...

A Calculate the beta of stock X and stock Y as follows A B 1 Year Stock X Sto ...

You have observed the following returns over time: Year Stock X Stock Y Market 2012 14% 13%

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You have observed the following returns over time:

Year	Stock X	Stock Y	Market
2012	14%	13%	12%
2013	19	7	10
2014	-16	-5	-12
2015	3	1	1
2016	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?

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Financial Management Theory And Practice

ISBN: 978-0176583057

3rd Canadian Edition

Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason

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Posted Date: Jun 15, 2022 05:53 AM

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You have observed the following returns over time: Year Stock X Stock Y Market 2012 14% 13%

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A Calculate the beta of stock X and stock Y as follows A B 1 Year Stock X Sto... View the full answer

Financial Management Theory And Practice

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