Beta for each stock based on the actual observations

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Concider stocks X and Y

Stock X, Expected Return 0.18, Standard Deviation 0.06, Covariance with market portfolio 0.00108

Stock Y, Expected Return 0.12, Standard Deviation 0.02, Covariance wht market portfolio 0.00036

The correlation between stocks X an Y is 0.2 and the risk-free rate of return is 8%. The market risk premium is 7% and the market porfolio has a standard deviation of 3%.

Calculate the beta for each stock based on the actual observations?

Reference no: EM131893184

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