Calculate each stock required rate of return

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EVALUATING RISK AND RETURN

Stock X has a 10.5% expected return, a beta coefficient of 1.0, and a 40% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%.

Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations.

CVx = 3.8

CVy = 1.92

Calculate each stock's required rate of return. Round your answers to two decimal places.

rx = 11%

ry = 12.5%

Calculate the required return of a portfolio that has $2,000 invested in Stock X and $5,000 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places.

rp =  %

Reference no: EM131974193

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