What are the required rates of return on stocks

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Reference no: EM131304009

You have observed the following returns over time:

Year Stock X Stock Y Market

2012 14% 13% 12%

2013 19 7 10

2014 −16 −5 −12

2015 3 1 1

2016 20 11 15

Assume that the risk-free rate is 6% and the market risk premium is 5%. What are the betas of Stocks X and Y? What are the required rates of return on Stocks X and Y?

Reference no: EM131304009

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