You have observed the following returns over time: Year Stock X Stock Y Market 2014 16 %
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Question:
You have observed the following returns over time:
Year | Stock X | Stock Y | Market | |||
2014 | 16 | % | 11 | % | 12 | % |
2015 | 20 | 8 | 12 | |||
2016 | -18 | -3 | -10 | |||
2017 | 5 | 3 | 1 | |||
2018 | 19 | 13 | 12 |
Assume that the risk-free rate is 4% and the market risk premium is 2%.
What are the betas of Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places.
Stock X:
Stock Y:
What are the required rates of return on Stocks X and Y? Do not round intermediate calculations. Round your answers to two decimal places.
Stock X: %
Stock Y: %
What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Do not round intermediate calculations. Round your answer to two decimal places.
%
Related Book For
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date: