Stock X and the "market" have had the following rates of returns over the past four years. 58% of your portfolio is invested in Stock X and the remaining 42% is invested in Stock Y.The risk-free rate is 7.68% and the market risk premium is also 7.68%.You estimate that 15.97% is the required rate of return on your portfolio.What is the beta of Stock Y?

A) 1.06
B) 1.12
C) 1.22
D) 1.11
E) 0.86

Question

Stock X and the "market" have had the following rates of returns over the past four years. 58% of your portfolio is invested in Stock X and the remaining 42% is invested in Stock Y.The risk-free rate is 7.68% and the market risk premium is also 7.68%.You estimate that 15.97% is the required rate of return on your portfolio.What is the beta of Stock Y?
Stock X and the market have had the following rates of returns over the past four years. 58% of your portfolio is invested in Stock X and the remaining 42% is invested in Stock Y.The risk-free rate is 7.68% and the market risk premium is also 7.68%.You estimate that 15.97% is the required rate of return on your portfolio.What is the beta of Stock Y? A) 1.06 B) 1.12 C) 1.22 D) 1.11 E) 0.86

A) 1.06 
B) 1.12 
C) 1.22 
D) 1.11 
E) 0.86

Quizplus · Accepted Answer

The Answer is B

Stock X and the "Market" Have Had the Following Rates