Stock X, Stock Y, and the market have had the following returns over the past four...
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Stock X, Stock Y, and the market have had the following returns over the past four years. Year 1 23 4 Market 10% 9 14 5 X 12% 6 10 4 Y 8% 3 12 -2 The risk-free rate is 5 percent. The market risk premium is 8 percent. What is the required rate of return for a portfolio which consists of $10,000 invested in Stock X and $15,000 invested in Stock Y? Stock X, Stock Y, and the market have had the following returns over the past four years. Year 1 23 4 Market 10% 9 14 5 X 12% 6 10 4 Y 8% 3 12 -2 The risk-free rate is 5 percent. The market risk premium is 8 percent. What is the required rate of return for a portfolio which consists of $10,000 invested in Stock X and $15,000 invested in Stock Y?
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Step 1 Calculate the weights of Stock X and Stock Y in the portfolio Stock X Weight ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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