Question: Do by hand... do not use excel... do in a paper You have observed the following returns over time: Year Stock X Stock Y Market

Do by hand... do not use excel... do in a paper

Do by hand... do not use excel... do in a paper You

You have observed the following returns over time: Year Stock X Stock Y Market 14% 13% 12% 2012 2013 19 7 10 2014 -16 -5 -12 1 2015 2016 3 20 1 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? c. What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y

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