Assume the security market line given below Assume that analysts have estimated the beta on two stocks as follows x 0 5 and y 2 What must the expected return on the two securities be in order for them to be a good purchase R 0 04 0 08B,

Question: Assume the security market line given below. Assume that analysts have estimated the beta on two stocks as follows: x = 0.5 and

Assume the security market line given below. Assume that analysts have estimated the beta on two stocks as follows: β_x = 0.5 and β_y = 2. What must the expected return on the two securities be in order for them to be a good purchase?

R 0.04+0.08B,

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