What is the betas of Stocks X and Y

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Question - You have observed the following returns over time.

Year

Stock X

Stock Y

Market

2015

12%

11%

9%

2016

12%

5%

10%

2017

-16%

-7%

-12%

2018

2%

1%

1%

2019

18%

12%

16%

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

What is the betas of Stocks X and Y?

a. 1.3, 0.8

b. 1.35, 0.9

c. 1.15, 0.90

d. 1.23, 0.68

Reference no: EM133091113

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