Question: In the table below you have given returns for share X, share Y and the market Year Average annual returns Share X Share Y Market

In the table below you have given returns for share X, share Y and the market

Year

Average annual returns

Share X

Share Y

Market return

1

12%

22%

15%

2

9%

8%

13%

3

7%

19%

14%

4

-1%

-10%

-9%

5

11%

20%

12%

6

4%

13%

9%

Calculate the value of: total risk, relative risk and systematic risk for shares X and Y from the information given in the above table.

Calculate the required rate of return for each share assuming that the risk-free rate of return is 6% p.a. (based this on the CAPM methodology).

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