Question: Assume that security retums are generated by the single-index model, where Ryis the excess return for security land RMis the market's excess return. The risk-

Assume that security retums are generated by the single-index model, where Ryis the excess return for security land RMis the market's excess return.

Assume that security retums are generated by the single-index model, where Ryis the excess return for security land RMis the market's excess return. The risk- free rate is 2%. Suppose also that there are three securities X, Y, and , characterized by the following data: Security Betas 0.8 1.0 1.2 E(Ri 10% 1290 490 25% 10% 2096 %

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