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Evaluating risk and return

Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 30% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%.

Calculate each stock's coefficient of variation. Round your answers to two decimal places.

CVx =

CVy =

Calculate each stock's required rate of return. Round your answers to two decimal places.

rx = %

ry = %

Calculate the required return of a portfolio that has $9,500 invested in Stock X and $6,500 invested in Stock Y. Round your answer to two decimal places.

rp = %

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92400855

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