Question: the correct answer is D. if you could help me figure out why that would be great! Stock X has an expected return of 20
the correct answer is D. if you could help me figure out why that would be great! Stock X has an expected return of 20 percent, a beta coefficient of 1.5) Stock Y has an expected return of 25 percent and a beta coefficient of 1.9. The risk-free rate is 2 percent and the required return on the overall market is 12 percent on the basis of the two stocks' expected and required returns, which stock(s) would be attractive to a diversified investor? X. Stock X only; its required return is equal to its expected return. b. Stock Y only, the expected return for Y exceeds the expected return for X. . Stock Y only; the required return for Y exceeds its expected return by 0.2%. d. Both stocks are attractive to a diversified investor. e. Neither stock is attractive to a diversified investor. STOC x STOCH Y Trays return = rfr + mornet-vis free) *Beter
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