$2$

Problem $11-18$ Reward$-$to$-$Risk Ratios

$15$

points

$\backslash$table$[[$Stock $Y$ has a beta of $1\mathrm{.}4$ and an expected return of $15\mathrm{.}1$ percent. Stock $Z$ has a beta of $0\mathrm{.}7$ and an expected return$],[$of $8\mathrm{.}6$ percent. If the risk$-$free rate is $5$ percent and the market risk premium is $6\mathrm{.}5$ percent, the reward$-$to$-$risk$],[$ratios for stocks $Y$ and $Z$ are,and,$P$