Stock y has a beta of 13 and an expected return of 13


Stock Y has a beta of 1.3 and an expected return of 13 percent. Stock Z has a beta of 0.75 and an expected return of 10.5 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

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Financial Management: Stock y has a beta of 13 and an expected return of 13
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