5. You have calculated the returns of Stock M, Stock N, and the Market over the...

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5. You have calculated the returns of Stock M, Stock N, and the Market over the period 2018- 2022: Year 2018 Stock M 14% Stock N Market 13% 12% 2019 19% 7% 10% 2020 -16% -5% -12% 2021 3% 1% 1% 2022 20% 11% 15% Assume that the risk-free rate is 6% and the market risk premium is 5%. a. Calculate the betas of Stocks M and N, respectively. Hint: Use 2 methods discussed in CH 6. b. Calculate the required rates of return for Stocks M and N, respectively. c. Calculate the required return for a portfolio, consisting of 60% in Stock M and 40% in Stock N. d. If Stock M's expected return is 18%, is Stock M under- or over-valued? 5. You have calculated the returns of Stock M, Stock N, and the Market over the period 2018- 2022: Year 2018 Stock M 14% Stock N Market 13% 12% 2019 19% 7% 10% 2020 -16% -5% -12% 2021 3% 1% 1% 2022 20% 11% 15% Assume that the risk-free rate is 6% and the market risk premium is 5%. a. Calculate the betas of Stocks M and N, respectively. Hint: Use 2 methods discussed in CH 6. b. Calculate the required rates of return for Stocks M and N, respectively. c. Calculate the required return for a portfolio, consisting of 60% in Stock M and 40% in Stock N. d. If Stock M's expected return is 18%, is Stock M under- or over-valued?