Solution-What are the required rates of return on Stocks X

What are the required rates of return on Stocks X and Y

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Reference no: EM132726845

Problem - You have observed the following returns over time:

Year	Stock X	Stock Y	Market
2015	14	13	12
2016	19	7	10
2017	-16	-5	-12
2018	3	1	1
2019	20	11	15

Assume that the risk-free rate is 6% and the market risk premium is 5%.

Required -

a. What are the betas of Stocks X and Y?

b. What are the required rates of return on Stocks X and Y?

c. What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?

Reference no: EM132726845

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What are the required rates of return on Stocks X and Y

Reference no: EM132726845

Reference no: EM132726845

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