Stock X has a beta of 0.88 and an expected return of 10.8 percent. Stock Y...

Stock X has a beta of 0.88 and an expected return of 10.8 percent. Stock Y has a beta of 1.15 and an expected return of 13.1 percent. What is the risk-free rate of return assuming that both stock X and stock Y are correctly priced?

Multiple Choice:

3.30 percent

2.06 percent

1.20 percent

3.50 percent

1.10 percent

Expert Solution

jeff jeffy answered 6 months ago

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