Find the Risk-Free Rate given the Expected Return on Stock Y is 20 %, the Expected Return on Market Portfolio is 24 % and Beta for Stock Y is 0.8. Select one: O a. 4% b. 5% c. 6% d. 7% e. None

Baghiben

The market risk premium (E[Rm]-Rf) is 6%. The risk-free rate (Rf ) is 2%. Asset X has beta equal to 0.8 and expected return equal to 7%. Asset Y has beta equal to 1 and expected return equal to 7.5%. What level of abnormal return can be expected from a 1:1 long-short portfolio of X and Y?   a. 0.7%   b. 0.6%   c. 0.5%   d. 0.4%   e. None of the above

suppose a risk free rate is 6% and the market premium is 7%. D1 is 1.25 per share and stock beta is 1.15. What is the required return?