Risk-free rate and market risk premium

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Stock Y has a beta of 1.8 and an expected return of 18.2 percent. Stock Z has a beta of 0.8 and an expected return of 9.6 percent. If the risk-free rate is 5.2 percent and the market risk premium is 6.7 percent, the reward-to-risk ratios for stocks Y and Z are ( ) and ( ) percent, respectively. Since the SML reward-to-risk is ( ) percent, Stock Y is (undervalued/overvalued) and Stock Z is (undervalued/overvalued) (Round your answers to 2 decimal places. (e.g., 32.16))

Reference no: EM13766277

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