If the risk-free rate is 40 percent and the market risk


Stock Y has a beta of 1.00 and an expected return of 15.50 percent. Stock Z has a beta of .80 and an expected return of 7 percent. If the risk-free rate is 4.0 percent and the market risk premium is 8.6 percent, what are the reward-to-risk ratios of Y and Z?

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Financial Management: If the risk-free rate is 40 percent and the market risk
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