Question: SHOW ALL FORMULAS AND STEPS Stock Y has a beta of 1.2 and an expected return of 13.7 percent. Stock Z has a beta of

 SHOW ALL FORMULAS AND STEPS Stock Y has a beta of

SHOW ALL FORMULAS AND STEPS

Stock Y has a beta of 1.2 and an expected return of 13.7 percent. Stock Z has a beta of 0.8 and an expected return of 9.5 percent. If the risk-free rate is 5.3 percent and the market risk premium is 6.3 percent, the reward-to-risk ratios for stocks Y and Z are and percent, respectively. Since the SML reward-to-risk is percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

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