Historical returns expected and required rates of return, Financial Management

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Historical returns expected and required rates of return

Historical Returns: Expected and Required Rates of Return You have observed the following returns over time:

Year Stock x Stock Y Market

2011 12% 14% 14%

2012 19% 7% 10%

2013 -17% -5% -14%

2014 4% 1% 2%

2015 22% 13% 18%

Assume that the risk-free rate is 6% and the market risk premium is 6%. Do not round intermediate calculations.

-What is the beta of Stock X? Round your answer to two decimal places.

-What is the beta of Stock Y? Round your answer to two decimal places.

-What is the required rate of return on Stock X? Round your answer to one decimal place.

-What is the required rate of return on Stock Y? Round your answer to one decimal place.

-What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place.

Please show calculation steps

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