The expected return on Stock X is 9.5%, the standard deviation of expected returns is 30%, and the beta coefficient is 0.8. Stock Y has a beta coefficient of 1.1, a standard deviation of 30.0%, and an expected return of 12.0%. The market risk premium is 5%, whereas the risk-free rate is 6%. Determine the necessary return for a portfolio with $7,500 invested in Stock X and $5,500 in Stock Y. Calculations in the middle shouldn't be rounded. Give your response a two-decimal place round. rp = %
The expected return on Stock X is 9.5%, the standard deviation of expected returns is 30%, and the beta coefficient is 0.8. Stock Y has a beta coefficient of 1.1, a standard deviation of 30.0%, and an expected return of 12.0%. The market risk premium is 5%, whereas the risk-free rate is 6%. Determine the necessary return for a portfolio with $7,500 invested in Stock X and $5,500 in Stock Y. Calculations in the middle shouldn't be rounded. Give your response a two-decimal place round. rp = %
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The expected return on Stock X is 9.5%, the standard deviation of expected returns is 30%, and the beta coefficient is 0.8. Stock Y has a beta coefficient of 1.1, a standard deviation of 30.0%, and an expected return of 12.0%. The market risk premium is 5%, whereas the risk-free rate is 6%.
Determine the necessary return for a portfolio with $7,500 invested in Stock X and $5,500 in Stock Y. Calculations in the middle shouldn't be rounded. Give your response a two-decimal place round. rp = %
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