Question
In: Finance
You have observed the following returns over time: Year Stock X Stock Y Market 2011 13...
You have observed the following returns over time:
| Year | Stock X | Stock Y | Market | |||
| 2011 | 13 | % | 11 | % | 10 | % |
| 2012 | 20 | 7 | 9 | |||
| 2013 | -13 | -6 | -10 | |||
| 2014 | 3 | 1 | 1 | |||
| 2015 | 20 | 11 | 17 | |||
Assume that the risk-free rate is 4% and the market risk premium is 6%.
-
What is the beta of Stock X? Do not round intermediate calculations. Round your answer to two decimal places.
What is the beta of Stock Y? Do not round intermediate calculations. Round your answer to two decimal places.
-
What is the required rate of return on Stock X? Do not round intermediate calculations. Round your answer to one decimal place.
%
What is the required rate of return on Stock Y? Do not round intermediate calculations. Round your answer to one decimal place.
%
-
What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Do not round intermediate calculations. Round your answer to one decimal place.
%
Solutions
Expert Solution
Given,
| Year | Stock X | Stock Y | Market | |||
| 2011 | 13 | % | 11 | % | 10 | % |
| 2012 | 20 | 7 | 9 | |||
| 2013 | -13 | -6 | -10 | |||
| 2014 | 3 | 1 | 1 | |||
| 2015 | 20 | 11 | 17 | |||
Risk free rate = 4%
Market risk premium = 6%
Solution :-
jeff jeffy answered 4 months agoRelated Solutions
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Year Stock X Stock Y Market
2011 15 % 14 % 12 %
2012 20 7 8
2013 -13 -4 -12
2014 3 1 1
2015 21 11 14
Assume that the risk-free rate is 4% and the market risk
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You have observed the following returns over time:
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2016
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2017
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2018
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%
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%
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2016
18
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2017
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2019
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2012
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-5
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What is the beta of Stock X? Round your answer to two decimal
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You have observed the following returns over time: Assume the risk-free rate is 3.55% and the...
You have
observed the following returns over time:
Assume the risk-free
rate is 3.55% and the market risk premium is 4.60%.
Year
Stock A
Stock B
Market
INPUT DATA
rRF
3.55%
Market Risk Premium
4.60%
1997
14.000%
15.000%
13.143%
a. What are the betas of Stocks A and
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1998
11.000%
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11.029%
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bB
1999
-2.500%
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2000
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Use the following returns for X and Y. Returns Year X Y 1 21.9 % 26.7...
Use the following returns for X and
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X
Y
1
21.9
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26.7
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2
–
16.9
–3.9
3
9.9
28.7
4
19.8
–14.8
5
4.9
32.7
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Use the following returns for X and Y. Returns Year X Y 1 22.0 %
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You are given the following information concerning a stock and the market: Returns Year Market Stock...
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Returns
Year
Market
Stock
2011
14
%
26
%
2012
10
10
2013
20
3
2014
−15
−31
2015
35
16
2016
15
18
a. Calculate the average return and standard
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