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Stock Y has a beta of 1.2 and an expected return of 15.3 percent. Stock Z has a beta of .8 and an expected return of 10.7 percent. If the risk-free rate is 6 percent and the market risk premium is 7 percent, the reward-to-risk ratios for Stocks Y and Z are and the SML reward-to-risk is percent, respectively. Since percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Stock Y has a beta of 1.2 and an expected return of 15.3 percent. Stock Z has a beta of .8 and an expected return of 10.7 percent. If the risk-free rate is 6 percent and the market risk premium is 7 percent, the reward-to-risk ratios for Stocks Y and Z are and the SML reward-to-risk is percent, respectively. Since percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter6: Risk And Return
Section: Chapter Questions
Problem 14P: You have observed the following returns over time: Assume that the risk-free rate is 6% and the...
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Stock Y has a beta of 1.2 and an expected return of 15.3 percent. Stock Z has a beta of .8 and an expected return of 10.7 percent. If the risk-free rate is 6 percent and the market risk premium is 7 percent, the reward-to-risk ratios for Stocks Y and Z are and the SML reward-to-risk is percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) percent, respectively. Since
Transcribed Image Text:Stock Y has a beta of 1.2 and an expected return of 15.3 percent. Stock Z has a beta of .8 and an expected return of 10.7 percent. If the risk-free rate is 6 percent and the market risk premium is 7 percent, the reward-to-risk ratios for Stocks Y and Z are and the SML reward-to-risk is percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) percent, respectively. Since
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